I found the root cause of the problem.
I had an LLB file that contained a VI with an invalid character in the file name. LabVIEW would compile the VIs, but at the end of the compilation process, the files are copied into a folder named for your .exe.
The invalid Windows file name could not be created, but the error message never contained the name of the file. I sent the LLB to NI and declared that I think this is a bug.
I found it by converting all of my LLBs to folders using the LLB Manager. When I got to the problem LLB, the conversion reported an error on the badly named file. I copied the LLB, deleted the offending file, converted the copied LLB to a folder without error. I manually saved the offending VI as a file into the folder without an error. Then I could compile.
I've had bad experiences in the past when I use "Save As" into an LLB to create a new VI. The "Save As" dialog is not a standard dialog and can act wierd when you use the control keys to move about within the name box. I might have somehow inserted a TAB or control character that LabVIEW was willing to accept as a VI name inside an LLB. LabVIEW just didn't know how to fix the name when saving it outside the LLB.
I spent over a week screwing around with creating new projects, mass compiling and re-installing LabVIEW because of this.
I know that many people will say "don't use LLBs", but this is the first time I have been bit by them in such a bad way.