As Bernie and Dan pointed out, its an issue with your substituion. you most likely have too many or too few dots .. in your symbolics.
The easiest way to see how the substitution is being handled is to add the symbols trace to your job:
do SJ against it in SDSF and add these extra DD's statements to your jcl above //c1msgs1:
//EN$TRSYM DD SYSOUT=*
//BSTERR DD SYSOUT=*
The results look like this :
INITIAL VALUE : &LISTLIB1
AFTER PASS 001 : &VPROJECT..&GROUP..&C1SSTAGE..LISTLIB
AFTER PASS 002 : &#PROJECTV...END.TACCP.LISTLIB
AFTER PASS 003 : &#&C1EN(1,1)PROJECTV..END.TACCP.LISTLIB
AFTER PASS 004 : &#TPROJECTV..END.TACCP.LISTLIB
AFTER PASS 005 : TTAP.END.TACCP.LISTLIB
INITIAL VALUE : &LISTLIB
AFTER PASS 001 : &VPROJECT..&GROUP..&C1ST..LISTLIB
AFTER PASS 002 : &#PROJECTV...END.TACCP.LISTLIB
AFTER PASS 003 : &#&C1EN(1,1)PROJECTV..END.TACCP.LISTLIB
AFTER PASS 004 : &#TPROJECTV..END.TACCP.LISTLIB
AFTER PASS 005 : TTAP.END.TACCP.LISTLIB