I am able to induce a similar error by putting a Utf-8 or Unicode encoded .hql file into blob storage and attempting to run it. Try saving your example.hql file as 'ANSI' in Notepad (Open, the Save As and the encoding option is at the bottom of the dialog) and then copy it to blob storage and try again.
If the file is not found on Start-AzureHDInsightJob, then that cmdlet errors out and does not return a new AzureHDInsightJob object. If you had a previous instance of the result saved, then the subsequent Wait-AzureHDInsightJob and Get-AzureHDInsightJobOutput would be referring to a previous run, giving the illusion of the same error for the not found case. That error should definitely indicate a problem reading an UTF-8 or Unicode file when one is not expected.