I have been working on a PowerShell script to keep our development process streamlined. I was planning on running it as a post-build event,
Looks like your problem is how relative paths are resolved. Relative paths are resolved based on the current location (stored in $pwd) and not based on the location of the script. So if you launched the script from C:\, it definitely would not work.
I would suggest you calculate the paths based on an argument (like Peter Seale shows), or grab the actual location of the script from:
$MyInvocation.MyCommand.Path