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SHAREPOINT WORKFLOWS ERROR on one (of more) WebApplication.

I need some help regarding the above title. After applying SP1 pack on our SharePoint Server 2007 (MOSS 3.0) the workflows aren't working anymmore on one of the WebApplications (located in SSP2) Workflows work, however on other existing applications (on SSP1 or SSP2) or newly created applications (on SSP1 or SSP2).

Details of error: 1. Default / Built in SharePoint Workflows are not starting 2. Sharepoint Designer Workflows throwing the following error message: "You do not have permissions to do this operation. Ask your website administrator to change your pemissions and then try again, or log on with another account that has this permission. To log on with another user account click ok. " 3. Before applying the SP1 on MOSS the workflows were working perfectly fine on this WebApplication.

so far: 1. I am logged in as Administrator (bot on Sharepoint site or when working with Sharepoint Designer). 2. Administrator is included in the list Site Collection Administrators 3. I noticed in Sharepoint designer that the username used for creating the workflow is 'converted' into SHAREPOINT\system (in the Modified By Column).

Has anybody come accross/fixed this error?

Any help much appreciated. Thanks D