[Raymond Mendoza]

I just encountered the same issue.

I noticed that my scratch disk was not plugged in when I started FCP.
That prompt for scratch disks showed up, then I plugged in the disk and hit “reset scratch disks”.

Nothing happened and I was brought to the main window.

When I tried to log and transfer, I got the “error:unknown” exclamation.

I reset the scratch disks in the system settings to the same settings that were already there, and everything started working.

There must have been some kind of corruption in this use case.