It is hard to understand what is going on there by having your description only.
but it may be much easier for you to troubleshoot if you execute Compiler.BuildMsiCmd. This way you will see (in the produced batch file) how your extension assembly is passed into candle/light and what may be a problem. Though I don't see any reason why you need to create an extension if you can do the same (managed CA) directly in your build script. See the whole set of "DTF (ManagedCA)" samples.
but it may be much easier for you to troubleshoot if you execute Compiler.BuildMsiCmd. This way you will see (in the produced batch file) how your extension assembly is passed into candle/light and what may be a problem. Though I don't see any reason why you need to create an extension if you can do the same (managed CA) directly in your build script. See the whole set of "DTF (ManagedCA)" samples.