1. During publishing, use %scratchGDB% for the Oriented Imagery Dataset Location to ensure proper access. Otherwise, the geoprocessing service is forced to use the geodatabase in the system input directory which is problematic.
2. During publishing, avoid using the URL for the DEM source, or choose the 'Preserve URL' option in the sharing pane to ensure the DEM image service source is not copied. But, this is unlikely the cause of the issue.
3. During publishing, use the INFO level message to obtain more detailed messages if the tool fails. It may be something else.
4. This is not reproducible in ArcGIS Pro 3.4 and ArcGIS Enterprise 11.4.