CRM 2011 User creation failure

Unable to create a user in CRM with Read/Write in Access Mode. Get the bellow error. I can however create a user with Administrative in Access Mode. I am not able to deactivate users as well. I can reboot server and all is well again. Would like to figure out what is causing this.

Unhandled Exception: System.ServiceModel.FaultException`1[[Microsoft.Xrm.Sdk.OrganizationServiceFault, Microsoft.Xrm.Sdk, Version=5.0.0.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35]]: Server was unable to process request.Detail:

<OrganizationServiceFault xmlns:i="www.w3.org/.../XMLSchema-instance" xmlns="schemas.microsoft.com/.../Contracts">

 <ErrorCode>-2147016649</ErrorCode>

 <ErrorDetails xmlns:d2p1="schemas.datacontract.org/.../System.Collections.Generic">

   <KeyValuePairOfstringanyType>

     <d2p1:key>CallStack</d2p1:key>

     <d2p1:value xmlns:d4p1="www.w3.org/.../XMLSchema" i:type="d4p1:string">   at Microsoft.Crm.Extensibility.VersionedPluginProxyStepBase.Execute(PipelineExecutionContext context)

  at Microsoft.Crm.Extensibility.Pipeline.Execute(PipelineExecutionContext context)

  at Microsoft.Crm.Extensibility.MessageProcessor.Execute(PipelineExecutionContext context)

  at Microsoft.Crm.Extensibility.InternalMessageDispatcher.Execute(PipelineExecutionContext context)

  at Microsoft.Crm.Extensibility.ExternalMessageDispatcher.ExecuteInternal(IInProcessOrganizationServiceFactory serviceFactory, IPlatformMessageDispatcherFactory dispatcherFactory, String messageName, String requestName, Int32 primaryObjectTypeCode, Int32 secondaryObjectTypeCode, ParameterCollection fields, CorrelationToken correlationToken, CallerOriginToken originToken, UserAuth userAuth, Guid callerId, Guid transactionContextId, Int32 invocationSource, Nullable`1 requestId, Version endpointVersion)

  at Microsoft.Crm.Extensibility.OrganizationSdkServiceInternal.ExecuteRequest(OrganizationRequest request, CorrelationToken correlationToken, CallerOriginToken callerOriginToken, WebServiceType serviceType)

  at Microsoft.Crm.Extensibility.OrganizationSdkServiceInternal.Execute(OrganizationRequest request, CorrelationToken correlationToken, CallerOriginToken callerOriginToken, WebServiceType serviceType)</d2p1:value>

   </KeyValuePairOfstringanyType>

 </ErrorDetails>

 <Message>Server was unable to process request.</Message>

 <Timestamp>2013-07-08T15:31:32.7536814Z</Timestamp>

 <InnerFault i:nil="true" />

 <TraceText i:nil="true" />

</OrganizationServiceFault>