First, I had this once and had to reset the index  to clear it. That would be a
last ditch effort...

Does WSS_ADMIN_WPG have write access to c:\windows\tasks? If not, manual crawls
will work, but scheduled ones will not, however with a different sympton (just
bringing it up because there is an outside chance it is the same). If not
explicitly defined as having access, it would still work  if your service
accounts were local administrators. I would check that one of those is true for
testing.

I am not saying to add all service accounts as local admins, btw...

It looks like my service account has modify, read & execute, list,
read and write on c:\windows\tasks and WSS_ADMIN_WPG has full  control
of the folder.

My service account is a member of both local admins and WSS_ADMIN_WPG.

are you getting any SQL errors on either your SharePoint Servers or SQl Server?

What are your event logs related to SharePoint?

No SQL errors on the SharePoint box not sure about the SQL box since
I don't have access to it. I have emailed my DBA's and asked them for
the logs for te last couple of days.

The only error  related to this is the following

Source: Office Server Search
Category: Gatherer
Event ID: 2423

The update  cannot be started  because all of the content  sources were
excluded by crawl  rules, or removed  from the index  configuration.

Context: Application 'SharedServices1', Catalog 'Portal_Content'

Details:
Unspecified error
(0x80004005)

For more information, see Help and Support Center at
http://go.microsoft.com/fwlink/events.asp.

Interesting to note that I get the same error when I try and initiate
an incremental update manually  as well as when the automatic full
crawl kicks off at night.

Verified........no errors related to SharePoint in any way, shape or
form on the SQL box although the service accounts are pounding the
server. Looking in the Security events the service accounts are
logging in almost every minute for some reason.

1. Kerberos authN, by chance?

2. Do you have your index  directory excluded  from anti-virus?

No Kerberos and I went back in and excluded  every directory I could
think of related to SharePoint and am still getting the error.

I am out of suggestions, then. I would probably open a call with CSS. Please let
us know what it is?

I'm
probably going to open the case beginning  of next week when I get
back to the office and will update  you as I find out more.