I got the above error when trying to generate a strong name key running filemon (see www.sysinternals.com) it showed that there was a file access error for me on the folder:

C:\Documents and Settings\All Users\Application Data\Microsoft\Crypto

I had to give myself permissions on this folder and tell windows to propogate them to all the child objects then I could successfully generate a key using

SN.exe -k mykey.snk

This is the first time I've used filemon but I doubt it will be the last.