Symptom: When trying to upgrade your 5508 Wireless LAN Controller from an older firmware version (6.0.199.4 in my case), you receive the following error:

% Error: Code file transfer failed - Error while writing output file

Solution: When upgrading the firmware on the 5508, greater versions need to be applied incrementally.  Stock 5508 WLCs appear to be shipping with Software Version 6.0.199.4, the following firmware versions should be applied to reach the latest and greatest versions.

I applied the following upgrades to reach higher versions:

6.0.x  to 7.2.x ED

7.2.x ED to 7.x