Issue with TeamCity 4.5

Hi,

I am having similar problems to (http://www.jetbrains.net/devnet/message/5230134#5230134) with pre-build events (defined in my visual studio project file). Buildlog.htm is below

Creating temporary file "d:\WorkspaceSVN\scatslib\comms\comms\Debug\BAT00000121203956.bat" with contents
[
@echo off
xcopy d:\WorkspaceSVN\scatslib\comms\comms\src\*.h  D:\WorkspaceSVN\shared\scatslib\comms\include\*.*  /S /C /I /Y
if errorlevel 1 goto VCReportError
goto VCEnd

:VCReportError
echo Project : error PRJ0019: A tool returned an error code from "Performing Pre-Build Event..."
exit 1

:VCEnd
]
Creating command line "d:\WorkspaceSVN\scatslib\comms\comms\Debug\BAT00000121203956.bat"
Creating temporary file "d:\WorkspaceSVN\scatslib\comms\comms\Debug\RSP00000221203956.rsp" with contents
[
/Od /I "D:\WorkspaceSVN\shared\threadit\threadit\include" /I "D:\WorkspaceSVN\shared\threadit\singleton\include" /I "D:\WorkspaceSVN\shared\scatslib\comms\include" /I "D:\WorkspaceSVN\shared\codelib\libconfig++\include" /I "D:\WorkspaceSVN\shared\codelib\log4cpp\include" /I "D:\WorkspaceSVN\shared\codelib\json_spirit_lib\include\json_spirit" /I "D:\WorkspaceSVN\shared\codelib\boost\include" /D "WIN32" /D "_DEBUG" /D "_CONSOLE" /D "LIBCONFIG_STATIC" /D "_UNICODE" /D "UNICODE" /Gm /EHsc /RTC1 /MTd /Yc"stdafx.h" /Fp"Debug\comms.pch" /Fo"Debug\\" /Fd"Debug\vc90.pdb" /FR"Debug\\" /W3 /c /ZI /TP /wd4290 .\src\scatsmessages\its\license\LicenseValidationMsg.cpp

And the error in Team city is

Project error PRJ0019: A tool returned an error code from "Performing Pre-Build Event..."

It is a x86 build, the build agent service is running under LOCAL SYSTEM account and i have added xcopy.exe in my %path%
When i build the solution file, everything ofcourse builds fine. But it seems that when it runs from TeamCity (4.5), it always returns true for
if errorlevel 1 goto VCReportError

Any help is appreciated,
Thanks.