Okay, this is a problem with the NrrdIO library, which gets confused as to whether it's supposed to use a Windows-style path (which is what you are providing) or a Cygwin-style path (which corresponds to the system is was compiled on). Essentially, by Unix/Cygwin standard, starting a path with anything but "/" means you are giving a relative (to the current working directory) path. So in the error message you are getting, you can see that the current directory was put in front of the path you provided (which is a Windows path, starting with "c:\", and not with "/").

The simple, albeit slightly inconvenient solution is to provide the input and output paths in Cygwin-style; your command line would thus have to be:

C:\cygwin\home\username\cmtk-newbuild\bin\reformatx -o
/cygdrive/c/Users/username/Desktop/fileout.nrrd --floating
/cygdrive/c/Users/username/Desktop/filein.nrrd /cygdrive/c/Users/username/Desktop/reference.nrrd /cygdrive/c/Users/username/Desktop/warp.xform

Note also the changed slashes, which change from Windows "\" to Unix "/".

This should work because the CMTK Cygwin tools use the Cygwin DLL for I/O, which provides for these paths to be valid.