Background Information
This issue usually occurs when a password-protected Microsoft Project file (*.mpp) is saved and published to Project Server. Due to the password protection, the project file becomes corrupted.
Resolution
Refer to the Microsoft Knowledge Base article - PRJ2002 (Project Plan with a Password Is Damaged When You Save the File to a New Name) at the following URL:
http://support.microsoft.com/default.aspx?scid=kb;en-us;812644