diff --git a/src/lru_disk_cache/mod.rs b/src/lru_disk_cache/mod.rs
index 65f7447616..7c5ceb1505 100644
--- a/src/lru_disk_cache/mod.rs
+++ b/src/lru_disk_cache/mod.rs
@@ -220,7 +220,7 @@ impl LruDiskCache {
         }
         //TODO: ideally LRUCache::insert would give us back the entries it had to remove.
         while self.size() + size > self.capacity() {
-            let (rel_path, _) = self.lru.remove_lru().expect("Unexpectedly empty cache!");
+            let (rel_path, _) = self.lru.remove_lru().ok_or(Error::FileTooLarge)?;
             let remove_path = self.rel_to_abs_path(rel_path);
             //TODO: check that files are removable during `init`, so that this is only
             // due to outside interference.
@@ -332,13 +332,12 @@ impl LruDiskCache {
         // Ensure we have enough space for the advertized space.
         self.make_space(size)?;
         let key = key.as_ref().to_owned();
+        let file = tempfile::Builder::new()
+            .prefix(TEMPFILE_PREFIX)
+            .tempfile_in(&self.root)?;
         self.pending.push(key.clone());
         self.pending_size += size;
-        tempfile::Builder::new()
-            .prefix(TEMPFILE_PREFIX)
-            .tempfile_in(&self.root)
-            .map(|file| LruDiskCacheAddEntry { file, key, size })
-            .map_err(Into::into)
+        Ok(LruDiskCacheAddEntry { file, key, size })
     }
 
     /// Commit an entry coming from `LruDiskCache::prepare_add`.
@@ -729,4 +728,38 @@ mod tests {
         assert!(!f.tmp().join("cache").join("file2").exists());
         assert!(!p4.exists());
     }
+
+    #[test]
+    fn test_prepare_add_rollback_on_tempfile_failure() {
+        // Verify that if tempfile creation fails inside prepare_add, the
+        // cache's `pending` and `pending_size` state is NOT incremented.
+        // Before the fix, prepare_add updated state BEFORE creating the
+        // tempfile, so a tempfile failure left pending_size > 0 forever,
+        // which later caused make_space() to panic with negative space.
+        let f = TestFixture::new();
+        let cache_dir = f.tmp().join("cache");
+        let mut c = LruDiskCache::new(&cache_dir, 100).unwrap();
+
+        // Sanity: a successful prepare_add bumps size, then dropping the
+        // entry must not leave pending state behind once committed/dropped.
+        let baseline_size = c.size();
+        assert_eq!(baseline_size, 0);
+
+        // Force tempfile creation to fail by removing the cache root
+        // out from under the cache after construction.
+        std::fs::remove_dir_all(&cache_dir).unwrap();
+
+        // prepare_add should now fail (tempfile_in cannot create in a
+        // missing directory).
+        let result = c.prepare_add("k/v", 10);
+        assert!(result.is_err(), "expected prepare_add to fail, got {:?}", result.is_ok());
+
+        // CRITICAL: pending state must not have advanced. Before the fix,
+        // size() would report 10 here even though no entry was created.
+        assert_eq!(
+            c.size(),
+            baseline_size,
+            "pending_size leaked after tempfile failure (regression of #2689)"
+        );
+    }
 }
diff --git a/src/server.rs b/src/server.rs
index be49c1dfd2..5d52308ff7 100644
--- a/src/server.rs
+++ b/src/server.rs
@@ -10,7 +10,7 @@
 // distributed under the License is distributed on an "AS IS" BASIS,
 // WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
 // See the License for the specific language governing permissions and
-// limitations under the License.SCCACHE_MAX_FRAME_LENGTH
+// limitations under the License.
 
 use crate::cache::readonly::ReadOnlyStorage;
 use crate::cache::{CacheMode, Storage, storage_from_config};
@@ -84,7 +84,7 @@ const DIST_CLIENT_RECREATE_TIMEOUT: Duration = Duration::from_secs(30);
 pub enum ServerStartup {
     /// Server started successfully on `addr`.
     Ok { addr: String },
-    /// Server Addr already in suse
+    /// Server Addr already in use
     AddrInUse,
     /// Timed out waiting for server startup.
     TimedOut,