It may also be that the LZMA compression parameters at image creation cause the expand job to fail. I stumbled upon that 5 years ago with WNDR3700.
Basically the ar71xx compression parameters at image creation needed to be changed for WNDR3700 to use a slightly smaller "dictionary" size. The default was 23bit, causing it be max. 8 MB size, which semi-regularly broke decompression in Nov 2012. Restricting dictionary to 20 bits helped, and that has been the default for WNDR3700/3800 since then.
Read from here: https://dev.archive.openwrt.org/ticket/12454.html#comment:12
It is quite possible that there is something similar with your device. That LZMA error 1 is typically just a generic error flag.