Sorry, I probably started writing the comment before you submitted yours. The time stamps are close.

For extracting you need /usr/bin/cpio installed, but since you posted the exact same command, I figured you have that. However, opening the cpio file doesn't need any external programs, and you said you can't even open it.

When you drag the cpio file from the gz archive to your desktop and then open the cpio file, what does BetterZip do? Does it open an empty window? Or does it put the cpio file into an untitled archive? Or does it display an error message?