I did check the package to see where it went wrong, and found out i was using an outdated version from SkyCity, and for testing i always use the same files that are sitting on the site.........
The error was sitting in the MasterFiles for Unreal, Unreal_S3TC_Hi_End_Texture_Package_03.zip contains an old 274 Mb large package while it should be a staggering 412 Mb large file.
My advise is to check the S3TC SkyCity.utx that is sitting in your texture folder, if its aprox 274 Mb you may want to re-download the package again. But please check before you download, if your file is aprox 412 Mb you got the correct file, no need to go download than !!!
Here is the downloadlink: [url=http://www.unrealtexture.com/Unreal/Downloads/Textures/S3TCHighEnd/MasterFiles/Unreal_S3TC_Hi_End_Texture_Package_03.zip]Unreal_S3TC_Hi_End_Texture_Package_03.zip[/url]
To be clear on this, the error occurs when downloading that MasterFile from:
www.celticwarriors.net
www.unrealtexture.com
www.oldunreal.com
since they all make use from the same file.
Only Unreal was affected and not UT, those downloads seem to contain the correct file.
Seeing the fact i make those files only once and than upload them, i suspect the file never was updated, which could mean theres no-one having the correct file. It also means that for most people there might be a signficant xmas S3TC update after all
Anyways if you got a smaller (older) version you better start downloading
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