The "Error 26" message means that the problem is with an index file. Usually, if you do the Utilities/Project/Reindex and rebuild the index files, it takes care of things. You say you've already tried that? If so, the next step, like John mentioned, is to make a duplicate project (save AS ...) when the project hsa been fixed, you can then delete the original project. If THIS does not solve the problem, I am told that reinstalling the program files only will do the trick.
It's great to have Bob Velke willing to help us UFT users (who are thinking of TMG) out, isn't it? Talk about great tech support! Wow!