The fixtest posted by Andy Raibeck a couple weeks ago should help you with this
long path problem.  Here's an excerpt from his note:

Fixtest 3.7.2.16 for the Windows client is now available
on the ftp site ftp.software.ibm.com. The directory is:

storage/tivoli-storage-management/patches/client/v3r7/Windows/v372/i386

From there, you can navigate to the "multi" or "single"
directory to obtain the fix.

One of the "highlights" of this fixtest is the ability to
support paths whose names exceed the Windows operating
system-defined maximum length of 259 characters.

Regards,

Mike Dile
Tivoli Storage Manager Client Development
Mike_Dile AT tivoli DOT com