I was just having this same problem and it was killing me! This video solved it for me: https://www.youtube.com/watch?v=AYbUUsdrC04 but here are the basics: when using the Euclidian Distance tool, click the "Environments" button at the bottom and then click "Processing Extent". Here change the default to something else. The easiest is just to use "Same as Display" but make sure you've zoomed out far enough to hold everything before you open the tool! Works perfectly!