What are the parameters you used in the tool? What is the coordinate systems involved in the inputs and outputs?
That error coincidently appears to have been found with certain datasets and project raster, which isn't directly related to your problem unless there is a projection from one coordinate system to another? (ie map vs data coordinate systems.)
Dan Patterson, thank you for your reply. The coordinate system for the GroundTerrain layer is :: NAD_1983_StatePlane_California_VI_FIPS_0406_Feet