The zip for DOS, OS/2 and windows has an option to specify a work directory. Zip writes the samerror message for inadequate space on the target drive and inadequate space on the work drive, without substituting the drive letter into the message text.
Good point. Zip knows where it's currently writing and so should be able to say if it was the work directory that ran out of space. We'll take a look and get back to you shortly.
For reference, can you tell us what version of zip you are using ("zip -v")?