File based repository should work in Deployment Manager v2.1.1 for platform version 7.3.1. Based on the log snippet you posted, it looks like there is an authentication failure of some sort. Double check the following, Auth profile for connecting to the SIT (QA) environment. Repository configuration should also be double checked in the SIT environment, make sure to test the connectivity to ensure that the repository connectivity passes there as well.
Authentication profile was configured properly in Deployment manager. Deployment manager can communicate to SIT server using the authentication profile. SIT environment can connect to its repository, test connection was successful. But when it tries to fetch the zip (RAP) from Deployment manager its failing. I am not sure how to fix it. Please help
A few additional things you can try to pinpoint the issue
a) This is rather obvious, but ensure that you filesystem location has the appropriate read-write permissions and is accessible. Assuming this is true, then try b) and c)
b) Ensure that SIT to filesystem repo connections are valid, beyond just these Test Connectivity - Try to import the archive directly from the repository in the SIT environment? This would require you to login to the SIT environment, use the import wizard, select repository as the source and then you File system based repository.
c) Ensure that dev environment can publish to the filesystem - Check that you are able to successfully publish or export to that repository. Confirm that the dev environment is actually writing the archive to the filesystem either through the Deployment Manager or directly by using the export wizard which will give you an option to export to the repository
We notice that target file path and source file path are different in the logs. But in my repository configuration for both DEV and SIT mentioned the same path.Also target server (SIT- on a separate server) doesn't have this file path.
Is there any configuration that we need to check for this one.
Exactly as suggested by gurrup1, there seems to be some mismatch in the repository configuration in the orchestrator instance (Deployment Manager). Make sure this configuration is exactly the same across all the environments including the orchestrator. It is especially important that the repository names (and type of repository) are the same across all instances. See bullet point 2 in the Step 2c of creating repositories .
There seems to be some mismatch between the repository configuration on the deployment manager and the one on the target systems in the pipeline. Double check this again, but it is also likely that someone from DM support should get on a call with you and walk through everything to further diagnose this issue. Please contact DeploymentManagerSupport@pega.com and we can arrange a time to meet.