You are correct, it does appear that the BAM file is generating that error.
Each BAM record should start with a 32 bit block size. The error message you see is that VerifyBamID tried to read the block size of a BAM file, but it failed to read all 32bits, but did not hit the end of the file. So basically it means that the read failed to read enough bytes for some reason.
Duplicate removal and base quality recalibration should not affect this error message.
To sanity check that the library can read the bam file on its own, I'd try running: bam validate.
./bam validate --in Sample1.Aligned.sortedByCoord.out.bam --so_coord --verbose
Let me know if the validation succeeds. It could be a lack of resources issue that is causing the file read to fail, but I think it is worth verifying that our tools can successfully read just the BAM file on its own.
Mary Kate Wing