Unable to encrypt Mail folder

In the past I have successfully protected my Mail folder (amongst others) with Espionage. But after an infection with the FlashBack malware, I decided to remove my protected folders and re-encrypt them with new passwords. But each of my attempts to re-encrypt my Mail folder has failed.
I initially thought this might be because I didn't have sufficient free disk space (my Mail folder is about 43G and I had about 55G of free space) but I have just freed up about 192G of space and I was still unable to encrypt the Mail folder. (I'm using OS 10.6.8 and Espionage 2.8.13)
The console output is below. Any advice much appreciated!
24/04/2012 00:15:11 Espionage[3756] ERROR (-[TEKeychainManager unlockWithPassword:]:322): SecKeychainUnlock returned: -25293
24/04/2012 00:15:34 [0x0-0xc00c0].com.taoeffect.Espionage[3756] SystemFlippers: didn't consume all data for long ID 0 (pBase = 0x1005fe188, p = 0x1005fe18c, pEnd = 0x1005fe190)
24/04/2012 00:15:34 Espionage[3756] INFO: removing from loginitems: /Applications/Mail.app
24/04/2012 00:15:57 Espionage[3756] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
24/04/2012 00:16:21 Espionage[3756] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
24/04/2012 00:16:21 EspionageHelper[179] INFO: preparing to encrypt: /Users/mf/Library/Mail
24/04/2012 00:16:21 EspionageHelper[179] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
24/04/2012 00:16:23 com.taoeffect.EspionageHelper[179] /Users/mf/Library/Mail/.Trashes: Permission denied
24/04/2012 00:55:18 com.taoeffect.EspionageHelper[179] 2012-04-24 00:55:18.051 copy-helper[3848:903] copy error (canceling): /Volumes/Mail/Mailboxes/IN FORMER/In - Former - Dec 2006.mbox/Attachments/644227/1/FOI DISCLOSURES 21.12.05: No space left on device
24/04/2012 00:55:19 com.taoeffect.EspionageHelper[179] could not access /Volumes/Mail/Mailboxes/IN FORMER/In - Former - Dec 2006.mbox/Attachments/644227/1/FOI DISCLOSURES 21.12.05 - No space left on device
24/04/2012 00:55:22 com.taoeffect.EspionageHelper[179] hdiutil: create failed - No space left on device
24/04/2012 00:55:22 EspionageHelper[179] ERROR (fixPermissions:88): couldn't set correct permissions on: /Users/mf/Library/.Mail.sparsebundle
24/04/2012 00:55:22 EspionageHelper[179] ERROR (setupImageForRecord:1294): hdiutil returned 1 trying to create dmg!
24/04/2012 00:55:22 Espionage[3756] ERROR (-[AppController operationFinished:]:1380): error 1 during operation
24/04/2012 00:55:22 EspionageHelper[179] INFO: Posted critical message: Couldn't setup image for 'Mail'
Check the log (see Espionage Help menu) for more info.
24/04/2012 00:55:23 EspionageHelper[179] ERROR (-[SetupEncryptedRecordTask runTask]:51): failed to properly setup possibly encrypted folder: /Users/mf/Library/Mail
24/04/2012 05:46:59 Espionage[3756] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/database 2012-04-24 054659 (1 item)
24/04/2012 05:46:59 Espionage[3756] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/Espionage 2012-04-24 054659 (1 item).keychain
24/04/2012 06:44:36 EspionageHelper[179] INFO: Posted alert message: Preventing launch of Mail because its folder 'Mail' is disabled.
You can enable the folder in Espionage.
24/04/2012 06:44:47 EspionageHelper[179] INFO: Posted alert message: Preventing launch of Mail because its folder 'Mail' is disabled.
You can enable the folder in Espionage.
24/04/2012 06:45:26 EspionageHelper[179] INFO: Enabling: /Users/mf/Library/Mail
24/04/2012 06:45:33 EspionageHelper[179] ERROR (-[NSFileManager(TEAdditions) aclsForFileAtPath:]:412): failed to open: /Volumes/EspionageMounts: No such file or directory
24/04/2012 06:45:47 Espionage[5254] INFO: readding to loginitems: /Applications/Mail.app
24/04/2012 06:45:54 Espionage[5254] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/database 2012-04-24 064554 (0 items)
24/04/2012 06:45:54 Espionage[5254] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/Espionage 2012-04-24 064554 (0 items).keychain
25/04/2012 07:02:12 EspionageHelper[190] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
25/04/2012 12:22:28 EspionageHelper[169] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 02:27:09 Espionage[30302] ERROR (-[EspionageInstaller loginListContainsHelper:isOutOfDate:removeIfFound:]:97): couldn't get list of login items: -1712
28/04/2012 02:28:06 [0x0-0x452452].com.taoeffect.Espionage[30302] SystemFlippers: didn't consume all data for long ID 0 (pBase = 0x1005fe188, p = 0x1005fe18c, pEnd = 0x1005fe190)
28/04/2012 02:28:06 Espionage[30302] INFO: removing from loginitems: /Applications/Mail.app
28/04/2012 02:28:26 Espionage[30302] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
28/04/2012 02:28:39 Espionage[30302] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
28/04/2012 02:28:40 EspionageHelper[169] INFO: preparing to encrypt: /Users/mf/Library/Mail
28/04/2012 02:28:40 EspionageHelper[169] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
28/04/2012 02:28:43 com.taoeffect.EspionageHelper[169] /Users/mf/Library/Mail/.Trashes: Permission denied
28/04/2012 03:10:21 com.taoeffect.EspionageHelper[169] 2012-04-28 03:10:21.507 copy-helper[30429:903] copy error (canceling): /Volumes/Mail/Mailboxes/IN FORMER/In - Former - Dec 2006.mbox/Attachments/644188/15/277R - MF.doc: No space left on device
28/04/2012 03:10:22 com.taoeffect.EspionageHelper[169] could not access /Volumes/Mail/Mailboxes/IN FORMER/In - Former - Dec 2006.mbox/Attachments/644188/15/277R - MF.doc - No space left on device
28/04/2012 03:10:26 com.taoeffect.EspionageHelper[169] hdiutil: create failed - No space left on device
28/04/2012 03:10:26 EspionageHelper[169] ERROR (fixPermissions:88): couldn't set correct permissions on: /Users/mf/Library/.Mail.sparsebundle
28/04/2012 03:10:26 EspionageHelper[169] ERROR (setupImageForRecord:1294): hdiutil returned 1 trying to create dmg!
28/04/2012 03:10:26 Espionage[30302] ERROR (-[AppController operationFinished:]:1380): error 1 during operation
28/04/2012 03:10:26 EspionageHelper[169] INFO: Posted critical message: Couldn't setup image for 'Mail'
Check the log (see Espionage Help menu) for more info.
28/04/2012 03:10:27 EspionageHelper[169] ERROR (-[SetupEncryptedRecordTask runTask]:51): failed to properly setup possibly encrypted folder: /Users/mf/Library/Mail
28/04/2012 05:02:43 Espionage[30302] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/database 2012-04-28 050242 (1 item)
28/04/2012 05:02:43 Espionage[30302] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/Espionage 2012-04-28 050243 (1 item).keychain
28/04/2012 05:09:48 Espionage[192] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 05:09:53 Espionage[192] ERROR (-[EspionageInstaller loginListContainsHelper:isOutOfDate:removeIfFound:]:97): couldn't get list of login items: -1712
28/04/2012 05:09:58 com.taoeffect.EspionageHelper[203] [iSpy.framework] ERROR (760): connect: No such file or directory
28/04/2012 05:09:58 EspionageHelper[203] ERROR (main:125): failed to start iSpy, reason: 1
28/04/2012 05:10:24 com.apple.launchd.peruser.501[124] (com.taoeffect.EspionageHelper[203]) Exit timeout elapsed (20 seconds). Killing
28/04/2012 05:10:25 Espionage[192] ERROR (-[AppController startHelperConnection]:825): caught exception (NSInvalidReceivePortException) while connecting to helper: connection went invalid while waiting for a reply
28/04/2012 05:10:26 Espionage[192] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 05:15:18 EspionageHelper[187] INFO: Posted alert message: Skipping launch of 'Mail': folder 'Mail' is locked
28/04/2012 05:15:22 EspionageHelper[187] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 05:16:53 EspionageHelper[187] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 07:22:05 EspionageHelper[187] INFO: Posted alert message: Preventing launch of Mail because its folder 'Mail' is disabled.
You can enable the folder in Espionage.
28/04/2012 07:22:49 Espionage[454] ERROR (-[EspionageInstaller loginListContainsHelper:isOutOfDate:removeIfFound:]:97): couldn't get list of login items: -1712
28/04/2012 07:23:07 EspionageHelper[187] INFO: Enabling: /Users/mf/Library/Mail
28/04/2012 07:23:16 EspionageHelper[187] ERROR (-[NSFileManager(TEAdditions) aclsForFileAtPath:]:412): failed to open: /Volumes/EspionageMounts: No such file or directory
28/04/2012 07:24:36 Espionage[454] INFO: readding to loginitems: /Applications/Mail.app
28/04/2012 23:27:26 Espionage[454] Sparkle Error: An error occurred in retrieving update information. Please try again later.
28/04/2012 23:27:26 Espionage[454] Sparkle Error (continued): A server with the specified hostname could not be found.
I initially thought this might be because I didn't have sufficient free disk space (my Mail folder is about 43G and I had about 55G of free space) but I have just freed up about 192G of space and I was still unable to encrypt the Mail folder. (I'm using OS 10.6.8 and Espionage 2.8.13)
The console output is below. Any advice much appreciated!
24/04/2012 00:15:11 Espionage[3756] ERROR (-[TEKeychainManager unlockWithPassword:]:322): SecKeychainUnlock returned: -25293
24/04/2012 00:15:34 [0x0-0xc00c0].com.taoeffect.Espionage[3756] SystemFlippers: didn't consume all data for long ID 0 (pBase = 0x1005fe188, p = 0x1005fe18c, pEnd = 0x1005fe190)
24/04/2012 00:15:34 Espionage[3756] INFO: removing from loginitems: /Applications/Mail.app
24/04/2012 00:15:57 Espionage[3756] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
24/04/2012 00:16:21 Espionage[3756] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
24/04/2012 00:16:21 EspionageHelper[179] INFO: preparing to encrypt: /Users/mf/Library/Mail
24/04/2012 00:16:21 EspionageHelper[179] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
24/04/2012 00:16:23 com.taoeffect.EspionageHelper[179] /Users/mf/Library/Mail/.Trashes: Permission denied
24/04/2012 00:55:18 com.taoeffect.EspionageHelper[179] 2012-04-24 00:55:18.051 copy-helper[3848:903] copy error (canceling): /Volumes/Mail/Mailboxes/IN FORMER/In - Former - Dec 2006.mbox/Attachments/644227/1/FOI DISCLOSURES 21.12.05: No space left on device
24/04/2012 00:55:19 com.taoeffect.EspionageHelper[179] could not access /Volumes/Mail/Mailboxes/IN FORMER/In - Former - Dec 2006.mbox/Attachments/644227/1/FOI DISCLOSURES 21.12.05 - No space left on device
24/04/2012 00:55:22 com.taoeffect.EspionageHelper[179] hdiutil: create failed - No space left on device
24/04/2012 00:55:22 EspionageHelper[179] ERROR (fixPermissions:88): couldn't set correct permissions on: /Users/mf/Library/.Mail.sparsebundle
24/04/2012 00:55:22 EspionageHelper[179] ERROR (setupImageForRecord:1294): hdiutil returned 1 trying to create dmg!
24/04/2012 00:55:22 Espionage[3756] ERROR (-[AppController operationFinished:]:1380): error 1 during operation
24/04/2012 00:55:22 EspionageHelper[179] INFO: Posted critical message: Couldn't setup image for 'Mail'
Check the log (see Espionage Help menu) for more info.
24/04/2012 00:55:23 EspionageHelper[179] ERROR (-[SetupEncryptedRecordTask runTask]:51): failed to properly setup possibly encrypted folder: /Users/mf/Library/Mail
24/04/2012 05:46:59 Espionage[3756] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/database 2012-04-24 054659 (1 item)
24/04/2012 05:46:59 Espionage[3756] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/Espionage 2012-04-24 054659 (1 item).keychain
24/04/2012 06:44:36 EspionageHelper[179] INFO: Posted alert message: Preventing launch of Mail because its folder 'Mail' is disabled.
You can enable the folder in Espionage.
24/04/2012 06:44:47 EspionageHelper[179] INFO: Posted alert message: Preventing launch of Mail because its folder 'Mail' is disabled.
You can enable the folder in Espionage.
24/04/2012 06:45:26 EspionageHelper[179] INFO: Enabling: /Users/mf/Library/Mail
24/04/2012 06:45:33 EspionageHelper[179] ERROR (-[NSFileManager(TEAdditions) aclsForFileAtPath:]:412): failed to open: /Volumes/EspionageMounts: No such file or directory
24/04/2012 06:45:47 Espionage[5254] INFO: readding to loginitems: /Applications/Mail.app
24/04/2012 06:45:54 Espionage[5254] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/database 2012-04-24 064554 (0 items)
24/04/2012 06:45:54 Espionage[5254] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/Espionage 2012-04-24 064554 (0 items).keychain
25/04/2012 07:02:12 EspionageHelper[190] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
25/04/2012 12:22:28 EspionageHelper[169] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 02:27:09 Espionage[30302] ERROR (-[EspionageInstaller loginListContainsHelper:isOutOfDate:removeIfFound:]:97): couldn't get list of login items: -1712
28/04/2012 02:28:06 [0x0-0x452452].com.taoeffect.Espionage[30302] SystemFlippers: didn't consume all data for long ID 0 (pBase = 0x1005fe188, p = 0x1005fe18c, pEnd = 0x1005fe190)
28/04/2012 02:28:06 Espionage[30302] INFO: removing from loginitems: /Applications/Mail.app
28/04/2012 02:28:26 Espionage[30302] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
28/04/2012 02:28:39 Espionage[30302] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
28/04/2012 02:28:40 EspionageHelper[169] INFO: preparing to encrypt: /Users/mf/Library/Mail
28/04/2012 02:28:40 EspionageHelper[169] WARN (num512BlocksInDir:165): FTS_ERR: /Users/mf/Library/Mail/.Trashes: Permission denied
28/04/2012 02:28:43 com.taoeffect.EspionageHelper[169] /Users/mf/Library/Mail/.Trashes: Permission denied
28/04/2012 03:10:21 com.taoeffect.EspionageHelper[169] 2012-04-28 03:10:21.507 copy-helper[30429:903] copy error (canceling): /Volumes/Mail/Mailboxes/IN FORMER/In - Former - Dec 2006.mbox/Attachments/644188/15/277R - MF.doc: No space left on device
28/04/2012 03:10:22 com.taoeffect.EspionageHelper[169] could not access /Volumes/Mail/Mailboxes/IN FORMER/In - Former - Dec 2006.mbox/Attachments/644188/15/277R - MF.doc - No space left on device
28/04/2012 03:10:26 com.taoeffect.EspionageHelper[169] hdiutil: create failed - No space left on device
28/04/2012 03:10:26 EspionageHelper[169] ERROR (fixPermissions:88): couldn't set correct permissions on: /Users/mf/Library/.Mail.sparsebundle
28/04/2012 03:10:26 EspionageHelper[169] ERROR (setupImageForRecord:1294): hdiutil returned 1 trying to create dmg!
28/04/2012 03:10:26 Espionage[30302] ERROR (-[AppController operationFinished:]:1380): error 1 during operation
28/04/2012 03:10:26 EspionageHelper[169] INFO: Posted critical message: Couldn't setup image for 'Mail'
Check the log (see Espionage Help menu) for more info.
28/04/2012 03:10:27 EspionageHelper[169] ERROR (-[SetupEncryptedRecordTask runTask]:51): failed to properly setup possibly encrypted folder: /Users/mf/Library/Mail
28/04/2012 05:02:43 Espionage[30302] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/database 2012-04-28 050242 (1 item)
28/04/2012 05:02:43 Espionage[30302] INFO: backed up: /Users/mf/Library/Application Support/Espionage/Backups/Espionage 2012-04-28 050243 (1 item).keychain
28/04/2012 05:09:48 Espionage[192] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 05:09:53 Espionage[192] ERROR (-[EspionageInstaller loginListContainsHelper:isOutOfDate:removeIfFound:]:97): couldn't get list of login items: -1712
28/04/2012 05:09:58 com.taoeffect.EspionageHelper[203] [iSpy.framework] ERROR (760): connect: No such file or directory
28/04/2012 05:09:58 EspionageHelper[203] ERROR (main:125): failed to start iSpy, reason: 1
28/04/2012 05:10:24 com.apple.launchd.peruser.501[124] (com.taoeffect.EspionageHelper[203]) Exit timeout elapsed (20 seconds). Killing
28/04/2012 05:10:25 Espionage[192] ERROR (-[AppController startHelperConnection]:825): caught exception (NSInvalidReceivePortException) while connecting to helper: connection went invalid while waiting for a reply
28/04/2012 05:10:26 Espionage[192] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 05:15:18 EspionageHelper[187] INFO: Posted alert message: Skipping launch of 'Mail': folder 'Mail' is locked
28/04/2012 05:15:22 EspionageHelper[187] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 05:16:53 EspionageHelper[187] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs
28/04/2012 07:22:05 EspionageHelper[187] INFO: Posted alert message: Preventing launch of Mail because its folder 'Mail' is disabled.
You can enable the folder in Espionage.
28/04/2012 07:22:49 Espionage[454] ERROR (-[EspionageInstaller loginListContainsHelper:isOutOfDate:removeIfFound:]:97): couldn't get list of login items: -1712
28/04/2012 07:23:07 EspionageHelper[187] INFO: Enabling: /Users/mf/Library/Mail
28/04/2012 07:23:16 EspionageHelper[187] ERROR (-[NSFileManager(TEAdditions) aclsForFileAtPath:]:412): failed to open: /Volumes/EspionageMounts: No such file or directory
28/04/2012 07:24:36 Espionage[454] INFO: readding to loginitems: /Applications/Mail.app
28/04/2012 23:27:26 Espionage[454] Sparkle Error: An error occurred in retrieving update information. Please try again later.
28/04/2012 23:27:26 Espionage[454] Sparkle Error (continued): A server with the specified hostname could not be found.