Yeah, I agree. I think it is the "packaging" process which zips the plugin files and "moves" them to the users computer during the update process.
You can see the update is successful from my end to the WP servers... because if you click on the "svn" link... you can see the updated files.
It's just the process of packaging it into a .zip file, and updating the users installation, that is the issue.
I'm still waiting for a reply from WP. I'll post back as soon as I hear something.
I wonder if any other plugin devs are experiencing this issue??