I noticed "C:\>nmake" at the top of your example. It looks as though you're trying to build something in "C:\". This is a bad idea for a variety of reasons, the least of which being that "C:\" usually contains everything on your hard disc, and as result, Makefile.PL will probably end up checking lots and lots of stuff to make sure the MANIFEST file is correct, as you may or may not have noticed.

My advice would be to move Makefile.PL and everything else to that /mytest directory you just created and try building there instead.