Thank you for a very speedy response. I suspect the issue is triggered by a very mangled GIT tree with too many merges and several hundred changed files.
We created the diff from windows, but the arc patch failure is consistent on Ubuntu, MingW and DOS, so I do not think that is relevant. I try to patch my D7, which seems to depend on D1. Patching D1 fails. Patching D7 with --skip-dependencies also fails, but on a different file. Both D1 and D7 are monster-diffs which probably should never have been pushed to phabricator. I suspect the issue is caused by the sum of these things...

Is there a workaround? We are evaluating phabricator and just stumbled across this issue. In our case, we got the error when an image file was deleted...