Hello Chuckm4614,
How is that external drive formatted? The Archive Utility, like most Apple GUI tools that deal with files, will create a lots of hidden files and folders, moving them, renaming them, and reassembling it all at the very end. If there are any unexpected issues, like a network volume or maybe an external volume, it just might not work. It could easily get confused and die halfway through, leaving a bunch of hidden files and folders that will cause problems later on.
There is not easy answer. The further you get from an HFS+ file system running on an SSD, the flakier the Apple operating system will get. You might be able to work around some of the problems using the "unzip" tool in the Terminal. Any 3rd party tools are likely to handle an external volume better than Apple software will. For example, I have a fast Windows network at work. But sometimes the OS will lock up (requiring a reboot) if I just try to perform a QuickLook on a small network text file. But if I catch myself before that spacebar habit kicks in, I can just open the file directly with TextWrangler. Generally, external volumes should only be used for copying single files. If you need to work on a file, or even just open it or preview it with Quicklook, you may need to copy it to a local disk.
