I had the same problem, but recently I fixed it with this: - Use short words, without espaces and without strange characters like "ñ", "+", "á", "ü", etc, for mxd archive, workspace, folder, mdb archive, gdb archive, target locations for ArcHydro and ApUtilities, etc. - Remove all TMP files. I use ArcGIS 10.0 with spanish supplement, but I avoid to use spanish characters in names.
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