I have tried this, unsuccessfully, still getting the same message. My settings for the "moderator" account are as follows:
ALLOW:All Users, Story Admin, Link Admin, Topic Admin, Event Admin, Poll Admin, Logged-in Users, Static Page Admin
DISALLOW:Root, Block Admin, User Admin, Group Admin, Plugin Admin, Mail Admin
By Allow, I mean I have a checkmark in the box and by Disallow, I mean the box is open. All of the groups settings are still at their default settings as I haven't went in and modified them.