This indicates issues during setup or some later actions that might have done so. The problem is likely related to the fact that the share
\\<HN>\Diagnositcs is not available. This share is created during setup time. Is it a HA installation? Every time you start a test a new directory is created at this loaction (\\<HN>\Diagnostics\<runid>)
and the runtime output files are placed there. Can you check if you can manually acces these files?