Solving Log and Transfer Error – The Red Exclamation Problem
This particular FCP7 quirk can be frustratingly mysterious, yet the solution is incredibly simple. It happened to me the other day and after longer than desired googling I finally found the solution thanks to this post from the Apple Discussion forums.
The Problem – Log & Transfer suddenly stops importing…
You’re merrily transcoding in your tapeless footage and for some reason FCP decides to be a bit tricky and stop importing any footage and instead presents you with this mysterious error of a red exclamation mark. (bottom left)

No matter what you do, (ejecting the card, opening and closing L&T etc etc) it will always present you with the red exclamation mark and refuse to import anything.
The Solution – Stupidly Simple
The key thing to notice in this image is that the Total Free Space: 0.

This means that L&T thinks the hard drive your capture scratch is set to has no free space on it and will not transcode to it. So the stupidly simple solution is the open up your FCP system preferences (Final Cut Pro > System Preferences) and reset your scratch disks.
Now everything will work just as it did. Notice also that the Total Free Space: 130GB reflects the real amount of free space on the drive. Hopefully this post will save you some time if this ever happens to you!
