As explained by @TheMadExile your project file is incomplete (damaged) and no longer contains all the information of your story project.
If the method described by @Chapel doesn't work for you then the recovered.txt file in the following linked archive file may help you recreate your story project.
edit: link to hosted archive file removed!
note: Let me know when you've downloaded the above file, or if you don't want, so I can delete it from the file hosting site,
The above file was generated (1) by extracting all the (base-64) image data from your original TWS file so that it now only contains standard Passage information, although it is still structured like a story project TWS file the Twine 1.x application still can't open it because it's still incomplete.
You can however open the recovered.txt file within a Text Editor (like Notepad) and page down through the file's contents to find the Passage information.
(1) I have also include the recover.py Python file used to generate the recovered.txt.