SharePoint - VSeWSS Error: Value does not fall within the expected range

Working with VSeWSS recently, I came across a very frustrating error when packaging (or deploying which includes the package process):

Error: System.ArgumentException
System.ArgumentException: Value does not fall within the expected range.

In my case the reason for this was a missing file in the solution i.e. the Visual Studio project file is referencing a file that doesn't exist on disk:

This file is referenced in one of the manifests:

To fix try one or more of the following:

• Expand all the folders in your solution and look for a missing file
• Get the latest from source control
• Ensure the file is in the correct location
• Make sure your colleagues add new files to sourcecontrol!

Hopefully this will save someone some time!