actually found the message in the error logs when it fails from designer...
Leaving Monitored Scope (EnsureListItemsData). Execution Time=21.6217424281578 6e38edd6-693b-4a26-8d86-a7e94c681adb
11/05/2012 12:18:43.28 w3wp.exe (0x1714) 0x1408 Document Management Server Workflow Features 8026 Critical Workflow Soap: GetTemplatesForItem failed Item: http://trac-sp01/demo/demotown/InformationManagement/Governance/testabc.docx Object reference not set to an instance of an object. Error: Object reference not set to an instance of an object. 6e38edd6-693b-4a26-8d86-a7e94c681adb
11/05/2012 12:18:43.28 w3wp.exe (0x1714) 0x1408 SharePoint Foundation General avfx High SOAP exception: System.NullReferenceException: Object reference not set to an instance of an object. at Microsoft.SharePoint.Workflow.SPWorkflowAssociation.get_SoapXml() at Microsoft.Office.Workflow.WorkflowImpl.GenerateAssociationXMLForSOAP(IEnumerable`1 associations, SPWeb CurrentWeb, String ItemInfo) at Microsoft.Office.Workflow.WorkflowImpl.GenerateTemplatesXMLForSoap(SPList list, SPListItem listitem, StringBuilder strRet, String strItemInfo) at Microsoft.Office.Workflow.WorkflowImpl.GetTemplatesForItem(String item) at Microsoft.Office.Workflow.Workflow.GetTemplatesForItem(String item) 6e38edd6-693b-4a26-8d86-a7e94c681adb