Every time a developer checks in a change to TFS and a build is kicked off, Continuum picks it up and attempts to deploy it an environment. That fails the first time for every new check-in. The logs indicate that Continuum cannot access the latest build folder (Message: Source Folder Does Not Exist), and provides the path it is unsuccessfully attempting to reach. You can browse to the path every time, and permissions do not appear to be an issue, at least by the time they are checked. A rerun of the pipeline allows everything to go through without further incident, and it does not appear to have this issue with deployments of the same application to the next environment. It only appears to be an issue with Continuum's initial connection to that build path.
To resolve the issue, the Continuum Team suggested adding a sleep / delay or retry command to the PowerShell script to delay the point at which it attempts to access the file. This is only a guess it looks like the issue is originating from the script and its inability to access the folder. It could be that the folder is in the process of being created or data is being written to it when the script initially tries to access it, causing the failure.