Diego Sueiro reported a problem running the poky-extract-sdk command on the Yocto mailing list: https://lists.yoctoproject.org/pipermail/yocto/2011-January/000835.html This is caused by a relative path being given as the installation directory. A fix will be forthcoming to master ASAP and my intention is the fix will make it into the upcoming Laverne point-release.
This was fixed in master with the following commit: http://git.pokylinux.org/cgit/cgit.cgi/poky/commit/?id=57392afdbb0daf79a42c9a7a6814145715582289
Verified fix works by passing relative paths to poky-extract-sdk.