I think I have isolated the problem to the drive. I ran the backup script manually to another drive and the rdiff-backup was completed without errors.
As I mentioned before, the drive has capacity. It is currently about 80% full. It is formated as NTFS and is attached through fstab with the NTFS-3g driver.
When i tried to create a new directory on the drive, it threw an error.
mkdir: cannot create directory `test': Operation not supported
I tried to run fsck on the drive, but it too threw an error since the drive is NTFS.
Any ideas on how I can troubleshoot the problem further?