Hi Kerry
The imsmanifest.xml is there and in the right location (I was looking for lmsmanifest!)
When I look at a SCORM package with subfolders the subfolders aren't also zipped. Are you able to unzip the files in the subfolders eg 2ELT and then use these files when zipping the SCORM.
If this doesn't help then please open a support ticket with the SCORM file in it so we can investigate further.
regards