Soemwhere, I forget where, I read of a person with this same issue and the problem turned out to be that the backup script was corrupt. Solution for them was to delete and create a new script. I am trying that today.
PD
I don't know if this will help you, but if you power down the machine and leave it off at least 15 minutes, it sometimes makes ArcServe start back functioning properly. The cold boot works where restarting doesn't help.
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