Check very carefully both the name of the file you specified under option (1), the standard formatting of the file name has a gpg suffix which may be a good indicator (although a renamed file would still work provided it is valid as the suffixes are simply there for human readbility).

You can also do some level of checking of the file by using the 'file' command, for example:

              [root@rkm-server tmp] #  file *
              RKMA-Backup-rkm-server.acme.com-20110308190346.tar.gz.gpg:    gzip compressed data                                  WRONG, for some reason this appears to be an unencrypted file

              [root@rkm-server tmp] #  file *
              RKMA-Backup-rkm-server.acme.com-20110308190346.tar.gz.gpg:    ASCII text                                                   WRONG, maybe this file got converted in an FTP BIN/ASCII translation?

              [root@rkm-server tmp] #  file *
              RKMA-Backup-rkm-server.acme.com-20110308190346.tar.gz.gpg:    GPG encrypted data                                    RIGHT, for some reason this appears to be an unencrypted file

This command can be used as a good first parse, however even the third file might not be correct if it was truncated and perhaps is missing the last half of itself.

Carefully recopy the rachived, encrypted backup file onto the applinace again to ensure the network file copy did not cause the issue, othwerwise you will need to select an alternative rachive file to restore.