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When building from the source and publishing locally, with the following settings in user.config set to true, there is an error generated by CreateDefaultSiteFolders and the setup fails:
If these values are set to false, the setup works correctly.
I realise this isn't considered a stable release version, so just a heads up.
Thanks for letting me know. I think I found the problem and fixed it but I have not tested a new deployment.
Can you try again using the latest code and confirm that it is fixed?
Thanks for the quick turn around. I'll give it another run as soon as I can and will let you know.