try to isolate the source of the problem by using the smartobject tester utility to execute the same smartobject method. This will tell us whether the problem lies in the InfoPath data source or in the SmartObject layer.
I found the problem and got it fixed.
The problem had to do with an issue in the user accounts. One of our users had an issue with the contacts.
I found the error in the log file that was created when the smartobject was run. Looking in the ServiceBroker folder at the error log I found this..
10-09-2010 01:19:52::269 FindSecurityUsersWithDefault
No mapping between account names and security IDs was done Resolving User:CN=Lastname, Firstname,OU=Emergency Op Admin,OU=Groups,OU=MSO,DC=abc,DC=intranet
at ADUM.Translate.DNToName(String DN)
at ADUM.K2UserManager2.FindSecurityUsersWithDefault(String Group, String Name, String Description, String Email, String Manager, String size, String domainLDAP, String upn, String uOrgUnit, String DisplayName)
I had our user account admin look up his account and he found the problem. (I removed the real username and replaced with lastname/ firstname )