It has worked for me before. I usually download the free item prior to them expiring, though.
It sounds like you might have issues with your PS3 outside of downloading free titles.
Try another game and let me know what happens.
downloaded malicious and thomas was alone 500 mb 270mb respectively
both installed and play fine
downloaded doa5 again 80029564 at 14 percent install
so far i have this problem only on doa 5 and mgs rising demo 5.8 gb and 3.41 gb respectively
i am downloading lotr war in the north 6.51gb
if i recieve the same error then it may be something with large files
my ps 3 is 320gb and has just a few demos the largest being infamous 2 2.31gb
thus i may end up just downloading doa 5 again and again
if you can please check the doa5 download from plus as others are reporting similar problems
thanks for the help