<error encoding string> displayed as output path | unable to bounce

[Funkylimb]

For the first time since installing Pro Tools 11 I tried to bounce to disk. When I clicked on 'File->Bounce to->Disk' . . . .nothing happened. No bounce dialog appeared. Then I noticed that in the I/O section of the Mix faders that the output stated <Error encoding string>. The input looks good. I somehow think that these are related but do not know how.
Also if I click on 'Setup->I/O' and go to the Output tab - the Default Output Bus says <Error encoding string>. I have attached a screenshot and my setup info is below. Any help would be greatly appreciated. I am using the digi003 hardware interface.

Computer model and processor speed
MacBook Pro8,2 2.2 GHz Intel Core i7

OS version
10.8.4

Pro Tools version
Pro Tools 11

Amount of RAM installed
16GB

Any attached peripherals (hard drives, video devices, other firewire or USB devices that may be attached, etc)
External firewire HD which is then daisy chained to the Digi003

Number and type (firewire, SATA, SCSI, etc) of drives installed
Internal HD and above mentioned firewire drive

Which of the drive(s) are being used for recording and playback
The firewire drive

A concise list of the troubleshooting you've already tried.
So far I have made sure that all software and drivers are up to date. Deleted preference files. search the forum and internet for <error encoding string>.

[Southsidemusic]

Hi

Have you installed the latest drivers for the Mbox 3 from Avid website?
You need to use the latest MBox drivers for PT11.

Did you try to press default on ALL options in i/o settings menu?
This usually solves alot of unusual behaviors of the out/ins.
Best Regards
Christopher

[Funkylimb]

Christopher,
Thanks so much for the quick reply. I am using the Digi 003 and not the MBox. I verified that I am using the latest driver which is version 11.0.0.
I went through all of the I/O settings and selected Default where I was given the option. Unfortunately I am still seeing the same issue.
-j