It is the space issue, Even I encountered the same problem with Transaction Replication and resolved it doing below:-

Cause:- The Snapshot you are taking in any drive, there is not enough space to hold the snapshot of your Publication. Published Articles size are bigger than space available in disk...

Steps:- 1. Check in which Drive your snapshot is getting stored, Right click on concern Publication --> Properties --> Snapshot --> Locations Of Snapshot files, there you will see one of the check box is selected "Put Files in the default folder' and "Put Files in Following Folder' with local or network mapped path.

2. Get the path and go to Drive and see how much disk space available there in that drive, that must be less than your Published Articles in that Publication...

3. Once you verified this and in order to run everything once again fine you need to free/make enough space in that Drive. Or point your Publication Snapshot to stored in other drive where you think enough space present...If changing drive path, change by Un checking 'Default Folder check box' and Checking 'Put files in following folder' Check box.

4. After doing above try taking Snapshot again, it wont throw same error again if you have pointed drive really having enough space.

Plz try this and do let me know if this doesn't work.

Thanks.

SurendraP..:-)