I ran into this problem after upgrading to yuicompressor 2.4.8
There is a knows bug in 2.4.8 where it does not handle the quoted paths generated by ant.
Going back to 2.4.7 fixed the issue for me. You can download 2.4.7 here: https://github.com/yui/yuicompressor/downloads
You can find discussion of the issue here: http://www.yuiblog.com/blog/2013/05/16/yuicompressor-2-4-8-released/
"New version 2.4.8 fails to parse Windows filename in quotes correctly. 2.4.7 works fine. Eg, command java -jar yuicompressor-2.4.8.jar “d:\work\common_source.js” –charset utf-8 –disableoptimizations -v -o “d:\work\common.js” gives error java.io.FileNotFoundException: workcommon.js:\work\coomon_source.js (The filename, directory name, or volume label syntax is incorrect). Unfortunately, this renders it entirely unusable."
And the YUI Compressor defect is here: https://github.com/yui/yuicompressor/issues/78