iMac late 2015 with Monterey. Opening DMG results in "Operation failed with status 107: corrupt image"

My 21.5" late 2015 iMac (running Monterey 12.6.5) suddenly stopped responding to my wireless keyboard and mouse. No option but to use the power button to restart. While restarting, the progress bar stopped at approximately 35% for more than half an hour. Numerous restart attempts did not result in a successful startup. I took the following actions to resolve above issue.

Command R from recovery tools:

- Disk utility; Selected First Aid which resulted in an OK.

- Reinstalled Monterey successfully.

Also tried:

- Used Option+Command+P+R to clear PRAM memory.

- Used Shift+Control+Left_Option+Power_Button to reset SMC.

- Attempted to start in Safe Mode which failed.

As a last resort I saved my Documents, Pictures and Downloads folder to an external device. They were saved as .DMG (Image from Folder...) files (Encryption: none, Image Format: compressed). Alas after a clean install two (size 52 GB and 29 GB) out of three DMG files turned out to be corrupted and fail any available action on the Disk Utility or numerous other solutions found on the web. The error messages are: "Corrupt Image" and "Operation failed with status 107: corrupt image".

First time I encountered an issue with DMG files. Always trusted the Disk Image feature. Does anyone know what error 107 precisely means? The message "Corrupt image" sounds too generic. All your help is greatly appreciated.