Anyway, since "it exists locally" (it was part of the Maven download, after all!), this shouldn't be an issue, right? Maven does keep going after that.
I'm not sure that Maven reporting that the file "exists" locally is correct. I may have created the file locally, started downloading it, then failed to finish the download.
Can you examine: C:\Documents and Settings\mcooper\.maven\repository\ velocity\jars\velocity-1.4-dev.jar
and confirm that it looks ok?
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