SirthOsiris: OK, old but adding my input.
I kept having this problem on release, had to install from the site itself through the 10 or so downloads. Worked. Recently tried to update and it gave me the error again. So I uninstalled and reinstalled. Now it just was uninstalled and had the error again.
Here's where you go, "WHY?" There's a gear icon under your list of games, the dark grey portion on the left. This gear is on the bottom right of this section. This is settings. At the bottom of this window is a section called Folders, with an area called "Install games to:" with where you're installing games. You do not use the installation prompt when you install the game, you use THIS setting. Why? Because somehow it WORKED and the game is downloading and installing for me.
So go into GOG Galaxy's settings to set your install path, at least to where you have the most space. Because I don't know.
Didn't notice the cog for the settings (forgotten about it too) and was wondering what on earth was overriding my manual setting for installation directory when installing a new game...
...it was trying to install onto an old drive I had recently REMOVED from my PC :D I don't even...why not say that in the error message instead of "out of space". Lord, Gog...
Thanks, SirthOsiris.
Fix yo shizz, GoG.