Migrate OS X using Migration Assistant and Time Machine - not enough space
The same thing happened to me. I lost a Mac virtual machine, which was not backed up by time machine on the host system, but it WAS backed up by the guest OS X system itself. After creating a new guest OS X system and figuring out that Migration Assistant was the correct method of restoring from a Time Machine backup, I was blocked by the same issue. MA claimed that I needed more space to restore the data from the backup. My target system was a single drive system with 80GB of total space and 60GB free, while the backup was only around 30GB in size. Even when only a small amount of files were selected, MA refused to restore it.

The target system had Server.app installed, while the original system backed up did NOT have Server.app installed. So, I simply moved Server.app to the Trash, and tried MA again... this time it worked and had no issues.