Form new sub-assy here

Hmmmm. You may be on to something. I did a 'Form new subassembly' today, and within an hour or two CTD. Another symptom was that the 'Browse' button in the 'Replace Components' property manager page didn't do anything.
Or course, I'm also working in an assembly with flexible subassemblies that are mated to other flexible subassemblies. As flaky as flexibles are, I would suspect them nefore anything else. I find it more than a little annoying that taking an assembly with no mate errors and making four subassemblies flexible causes the FM to light up like a Christmas tree. And, yes, I'm aware of the fact that you need separate configs for each flexible instance, so that's not the problem.
Also, limit mates are completely ignored when they are part of a flexible subassembly. Well, not completely ignored I guess. There is a slight 'hitch' in the dynamic motion at the point the limit mate should stop, but then it continues on past the limit.
Jim S.

Try working for a long time on an assembly and when you get to the drawing, have SW go POOF a couple of clicks after you place Stacked Balloons.
Did it in SW2004 sp2.1 and sp1.0.