It looks like there's something wrong with the ISO. Can you show the log page? It'll show more detail about why there's an error opening the file.
It's not transfer related because obviously it happens when you're trying to add the file to the list.
If you copied this ISO using another manager or USB loader and removed any partitions, then that would be the problem since they ignore the second partition table in the disc. WBM would try to read the other (now invalid) partitions which would cause an error. I'll need to code a workaround for it until people realise that it's important to deal with all 4 partition tables.
If that is the problem, you could re-rip the disc and keep ALL partitions, which will produce a fully valid WBFS file/ISO. The current version of WBM has the opposite problem, SSBB must be copied using "game only" because of a little flaw in my code. 0.3.5 will work fine with all settings.
Edit:
All other managers will work fine with the errors in the ISO because they ignore the other partition tables, so that's another option..