Office Communicator Error Message received when expanding a group distribution list

Here are some troubleshooting steps for when you expand a group distribution list in Communicator and you receive a message "Cannot perform this action, and the cause is unknown. Contact your system administrator to investigate this problem."

First there is the KB article 959388 that covers one particular cause but I would try the following before performing the action in https://support.microsoft.com/kb/959388.

It could be as simple as the Office Communicator signed-in user being different than Outlook logged in profile or the Outlook profile has not been configured. In this case there is no Outlook integration from Office Communicator side which is necessary to display properties of a distribution list.

Next thing to check on the Web Components server is whether IIS_WPG has sufficient permissions.

IIS Logs would show

2009-03-25 13:25:13 W3SVC1 192.168.100.186 POST /GroupExpansion/Int/service.asmx - 443 - 192.168.100.12 Microsoft+Office+Communicator/3.0 401 1 0
2009-03-25 13:25:13 W3SVC1 192.168.100.186 POST /GroupExpansion/Int/service.asmx - 443 O\F2251 192.168.100.12 Microsoft+Office+Communicator/3.0 500 0

Resolution is to check the Local Security Policy "Impersonate a client after authenticated" and add IIS_WPG group to this policy. 

This is found under Local Computer Policy->Computer Configuration->Windows Settings->Security Settings->Local Policies->User Rights Assignment