I have run into a similar problem. In a nutshell, we have an application that programmatically generates EAR files to be deployed elsewhere, using the standard J2SE zip packages. The generated EAR structure seems fine, directory structure is intact with the proper case. When you try to deploy, JBoss throws a similar error:
13:33:20,158 ERROR [MainDeployer] Could not initialise deployment: file:/C:/platform/jboss-baseline/jboss/server/sip/deploy/CSS.ear
org.jboss.deployment.DeploymentException: No META-INF/application.xml found
at org.jboss.deployment.EARDeployer.init(EARDeployer.java:119)
at org.jboss.deployment.MainDeployer.init(MainDeployer.java:799)
at org.jboss.deployment.MainDeployer.deploy(MainDeployer.java:736)
at org.jboss.deployment.MainDeployer.deploy(MainDeployer.java:709)
at sun.reflect.GeneratedMethodAccessor35.invoke(Unknown Source)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:25)
at java.lang.reflect.Method.invoke(Method.java:324)
at org.jboss.mx.interceptor.ReflectedDispatcher.invoke(ReflectedDispatcher.java:141)
at org.jboss.mx.server.Invocation.dispatch(Invocation.java:80)
at org.jboss.mx.interceptor.AbstractInterceptor.invoke(AbstractInterceptor.java:119)
at org.jboss.mx.server.Invocation.invoke(Invocation.java:74)
at org.jboss.mx.interceptor.ModelMBeanOperationInterceptor.invoke(ModelMBeanOperationInterceptor.java:131)
at org.jboss.mx.server.Invocation.invoke(Invocation.java:74)
at org.jboss.mx.server.AbstractMBeanInvoker.invoke(AbstractMBeanInvoker.java:242)
at org.jboss.mx.server.MBeanServerImpl.invoke(MBeanServerImpl.java:642)
at org.jboss.mx.util.MBeanProxyExt.invoke(MBeanProxyExt.java:176)
at $Proxy7.deploy(Unknown Source)
at org.jboss.deployment.scanner.URLDeploymentScanner.deploy(URLDeploymentScanner.java:305)
at org.jboss.deployment.scanner.URLDeploymentScanner.scan(URLDeploymentScanner.java:481)
at org.jboss.deployment.scanner.AbstractDeploymentScanner$ScannerThread.doScan(AbstractDeploymentScanner.java:204)
at org.jboss.deployment.scanner.AbstractDeploymentScanner.startService(AbstractDeploymentScanner.java:277)
at org.jboss.system.ServiceMBeanSupport.jbossInternalStart(ServiceMBeanSupport.java:271)
at org.jboss.system.ServiceMBeanSupport.jbossInternalLifecycle(ServiceMBeanSupport.java:221)
at sun.reflect.GeneratedMethodAccessor2.invoke(Unknown Source)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:25)
at java.lang.reflect.Method.invoke(Method.java:324)
at org.jboss.mx.interceptor.ReflectedDispatcher.invoke(ReflectedDispatcher.java:141)
at org.jboss.mx.server.Invocation.dispatch(Invocation.java:80)
at org.jboss.mx.server.Invocation.invoke(Invocation.java:72)
at org.jboss.mx.server.AbstractMBeanInvoker.invoke(AbstractMBeanInvoker.java:242)
at org.jboss.mx.server.MBeanServerImpl.invoke(MBeanServerImpl.java:642)
at org.jboss.system.ServiceController$ServiceProxy.invoke(ServiceController.java:891)
at $Proxy0.start(Unknown Source)
at org.jboss.system.ServiceController.start(ServiceController.java:416)
at sun.reflect.GeneratedMethodAccessor4.invoke(Unknown Source)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:25)
at java.lang.reflect.Method.invoke(Method.java:324)
at org.jboss.mx.interceptor.ReflectedDispatcher.invoke(ReflectedDispatcher.java:141)
at org.jboss.mx.server.Invocation.dispatch(Invocation.java:80)
at org.jboss.mx.server.Invocation.invoke(Invocation.java:72)
at org.jboss.mx.server.AbstractMBeanInvoker.invoke(AbstractMBeanInvoker.java:242)
at org.jboss.mx.server.MBeanServerImpl.invoke(MBeanServerImpl.java:642)
at org.jboss.mx.util.MBeanProxyExt.invoke(MBeanProxyExt.java:176)
at $Proxy4.start(Unknown Source)
at org.jboss.deployment.SARDeployer.start(SARDeployer.java:261)
at org.jboss.deployment.MainDeployer.start(MainDeployer.java:935)
at org.jboss.deployment.MainDeployer.deploy(MainDeployer.java:746)
at org.jboss.deployment.MainDeployer.deploy(MainDeployer.java:709)
at org.jboss.deployment.MainDeployer.deploy(MainDeployer.java:693)
at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:39)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:25)
at java.lang.reflect.Method.invoke(Method.java:324)
at org.jboss.mx.interceptor.ReflectedDispatcher.invoke(ReflectedDispatcher.java:141)
at org.jboss.mx.server.Invocation.dispatch(Invocation.java:80)
at org.jboss.mx.interceptor.AbstractInterceptor.invoke(AbstractInterceptor.java:119)
at org.jboss.mx.server.Invocation.invoke(Invocation.java:74)
at org.jboss.mx.interceptor.ModelMBeanOperationInterceptor.invoke(ModelMBeanOperationInterceptor.java:131)
at org.jboss.mx.server.Invocation.invoke(Invocation.java:74)
at org.jboss.mx.server.AbstractMBeanInvoker.invoke(AbstractMBeanInvoker.java:242)
at org.jboss.mx.server.MBeanServerImpl.invoke(MBeanServerImpl.java:642)
at org.jboss.mx.util.MBeanProxyExt.invoke(MBeanProxyExt.java:176)
at $Proxy5.deploy(Unknown Source)
at org.jboss.system.server.ServerImpl.doStart(ServerImpl.java:396)
at org.jboss.system.server.ServerImpl.start(ServerImpl.java:293)
at org.jboss.Main.boot(Main.java:151)
at org.jboss.Main$1.run(Main.java:405)
at java.lang.Thread.run(Thread.java:534)
Interestingly, if you explode the EAR, everything is gravy. If anyone has run across similar problems or has any suggestions, I'm all ears.