When I had a similar error message with one of my workflows, I traced the
problem back to the fact that the email was going to a SharePoint Group, and the
users didn't have read permission on the membership of the SharePoint group.
When I gave read permission on the group to everyone, then the workflow started
to work. I don't know if your problem is the same or not, but I thought I would
point out the obvious that a user cannot send an email to a group unless the
members of the group to which the person is sending the email is visible to that
user. So in Group Settings, you have to make sure the "Who can view the
membership" is set to Everyone, not just group members, since the person
starting the workflow will not be a member of the group, if that group is the
approval group, for example.

It's probably not the email operation that's causing the problem, but actions
such as "Set field in current item". I have a condition that tests if the
creator is a member of the IT group. If not, I set the creator in the Customer
Name field.

The problem is, the workflow seems to run on behalf of the user, so removing
Edit seems to prevent any updating of the item. How can I get around this?
Anyone? Bueller?