IBCO_STAGING_RETRY means that FRS is waiting to retry local staging file generation. This could indicate that the staging directory is full. See Staging Directory is Full for details.
Note that in Windows 2000 SP3 and Windows Server 2003, the staging directory does not fill up. See Adjust the Staging Directory Size Accordingly and article 329491, "Configuring Correct Staging Area Space for Replica Sets" at http://support.microsoft.com/?id=329491.
If problem persists, contact Microsoft Product Support Services and increase the severity of debug logs as follows: