just installed trial, first folder encrypt fails

Hello! I'm very excited to use Espionage 3, but it seems I've run into a snag even before getting started. I downloaded and installed the trial, and the very first folder I try to protect results in the attached error dialog box. I am also going to cut and paste the console contents in the case that it's helpful. I hope this ends up being some trivial config issue, this software really is exactly what I need if I can get it to work!
Many thanks,
-Greg
11/21/12 12:21:36.586 PM fseventsd[36]: disk logger: failed to open output file /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/YnmOkAwV[M/.fseventsd/000000000492b161 (No such file or directory). mount point /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/YnmOkAwV[M/.fseventsd
11/21/12 12:21:36.587 PM fseventsd[36]: disk logger: failed to open output file /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/YnmOkAwV[M/.fseventsd/000000000492b161 (No such file or directory). mount point /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/YnmOkAwV[M/.fseventsd
11/21/12 12:21:36.000 PM kernel[0]: hfs: Initializing the journal (joffset 0xc8000 sz 0x800000)...
11/21/12 12:21:39.146 PM fseventsd[36]: could not open <</Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/BYaVmuvwSC/.fseventsd/fseventsd-uuid>> (No such file or directory)
11/21/12 12:21:39.146 PM fseventsd[36]: log dir: /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/BYaVmuvwSC/.fseventsd getting new uuid: 3DDEE1EA-533D-40C5-9118-481C0E090F88
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 634 wr: 634 q_size: 1024 flags: 0x0
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 379 wr: 379 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 124 wr: 124 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 893 wr: 893 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 638 wr: 638 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 383 wr: 383 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 128 wr: 128 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 897 wr: 897 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 642 wr: 642 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 387 wr: 387 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 132 wr: 132 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 901 wr: 901 q_size: 1024 flags: 0x1
11/21/12 12:21:54.523 PM Espionage[558]: ERROR (-[NSFileManager(TEAdditions) copyOrMoveContentsFrom:intoLocationAt:destinationName:options:upOneLevel:cancelBlock:move:error:]:480): failed because: !subitems
11/21/12 12:21:54.523 PM Espionage[558]: ERROR (-[NSFileManager(TEAdditions) copyOrMoveContentsFrom:intoLocationAt:destinationName:options:upOneLevel:cancelBlock:move:error:]:499): error 260 durng copy of: file://localhost/Users/gchun/Documents/private/
11/21/12 12:21:54.524 PM Espionage[558]: ERROR (+[DiskMaster createDiskForFolderFace:diskInfoSettings:updateUI:error:]:255): failed copy of /Users/gchun/Documents/private into diskimage file://localhost/Users/gchun/Library/Ap ... arsebundle
11/21/12 12:21:54.531 PM fseventsd[36]: Events arrived for /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/BYaVmuvwSC after an unmount request! Re-initializing.
11/21/12 12:21:54.531 PM fseventsd[36]: creating a dls for /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/BYaVmuvwSC but it already has one...
11/21/12 12:21:54.779 PM Espionage[558]: WARN (-[EncryptFolderTask go:]:253): Error during copy: The file “private” couldn’t be opened because there is no such file.
Could not copy all of: /Users/gchun/Documents/private
See system log for more.
Many thanks,
-Greg
11/21/12 12:21:36.586 PM fseventsd[36]: disk logger: failed to open output file /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/YnmOkAwV[M/.fseventsd/000000000492b161 (No such file or directory). mount point /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/YnmOkAwV[M/.fseventsd
11/21/12 12:21:36.587 PM fseventsd[36]: disk logger: failed to open output file /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/YnmOkAwV[M/.fseventsd/000000000492b161 (No such file or directory). mount point /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/YnmOkAwV[M/.fseventsd
11/21/12 12:21:36.000 PM kernel[0]: hfs: Initializing the journal (joffset 0xc8000 sz 0x800000)...
11/21/12 12:21:39.146 PM fseventsd[36]: could not open <</Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/BYaVmuvwSC/.fseventsd/fseventsd-uuid>> (No such file or directory)
11/21/12 12:21:39.146 PM fseventsd[36]: log dir: /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/BYaVmuvwSC/.fseventsd getting new uuid: 3DDEE1EA-533D-40C5-9118-481C0E090F88
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 634 wr: 634 q_size: 1024 flags: 0x0
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 379 wr: 379 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 124 wr: 124 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 893 wr: 893 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 638 wr: 638 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 383 wr: 383 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 128 wr: 128 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 897 wr: 897 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 642 wr: 642 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 387 wr: 387 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 132 wr: 132 q_size: 1024 flags: 0x1
11/21/12 12:21:43.000 PM kernel[0]: fsevents: watcher failing behind: Memeod (pid: 91) rd: 901 wr: 901 q_size: 1024 flags: 0x1
11/21/12 12:21:54.523 PM Espionage[558]: ERROR (-[NSFileManager(TEAdditions) copyOrMoveContentsFrom:intoLocationAt:destinationName:options:upOneLevel:cancelBlock:move:error:]:480): failed because: !subitems
11/21/12 12:21:54.523 PM Espionage[558]: ERROR (-[NSFileManager(TEAdditions) copyOrMoveContentsFrom:intoLocationAt:destinationName:options:upOneLevel:cancelBlock:move:error:]:499): error 260 durng copy of: file://localhost/Users/gchun/Documents/private/
11/21/12 12:21:54.524 PM Espionage[558]: ERROR (+[DiskMaster createDiskForFolderFace:diskInfoSettings:updateUI:error:]:255): failed copy of /Users/gchun/Documents/private into diskimage file://localhost/Users/gchun/Library/Ap ... arsebundle
11/21/12 12:21:54.531 PM fseventsd[36]: Events arrived for /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/BYaVmuvwSC after an unmount request! Re-initializing.
11/21/12 12:21:54.531 PM fseventsd[36]: creating a dls for /Users/gchun/Library/Application Support/com.taoeffect.Espionage3/Data/Temp/BYaVmuvwSC but it already has one...
11/21/12 12:21:54.779 PM Espionage[558]: WARN (-[EncryptFolderTask go:]:253): Error during copy: The file “private” couldn’t be opened because there is no such file.
Could not copy all of: /Users/gchun/Documents/private
See system log for more.