A few clues pointed to this file as the culprit:
- First time through, the installer complained that some other Cygwin process had locked the readme file
- the installer just looped indefinitely on extracting the README file from alternatives.lst.bz until I killed it
- The only .bz file in C:\cygwin\etc\setup with today's date was alternatives.lst.bz.
Here's what the log file recorded, for several thousand lines:
2009/05/04 11:01:23 io_stream_cygfile:
fopen(/etc/alternatives/README) failed 13 Permission denied
2009/05/04 11:01:23 Failed to open
cygfile:///etc/alternatives/README for writing.
I renamed the file to alternatives.lst.bz.bak , then reran setup.exe to successfully upgrade Cygwin.
Now I suppose I should log a bug report...