@fruloops, there is indeed a good chance that the issue you are reporting is the same CLI issue linked by @shaunmulligan. What happens is that the CLI creates a tar stream which should have only forward slashes as path separator, but under Windows in some cases back slashes are being used instead. The Dockerfile COPY instruction copies from that tar stream, and src may not be found because it was not properly added to the stream. There are few github repos that are affected and used by the CLI and the cloud builders; beside the two mentioned by Shaun, this other one as well:
They are under review and testing, and I hope that by the end of next week they will be deployed to the production environment (cloud builders) and released under a new CLI version.