The cause is probably that the "Left / Right Locators" are backwards. If this is the case, the top part of the project view timeline will look red...If it is correct it should look blue. Here are the errors for this problem: In Cubase 5 the error: "Not Enough Space On Disk For Export" In Cubase 3 & 4 the error: "An Error Occurred During Export!" Switching the "Left / Right Locators" should fix the problem.
Video on the issue: Cubase 3, 4, & 5 - Cubase Mixdown Errors
