Creation of New entity in CRM 2011 with System admin user throws an error

During upgrade from CRM 3.0 to CRM 4.0 and then to CRM 2011, we are facing an issue. Admin user is also not able to create new entity.

Any help is appreciated.

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>MSCRM Error Report:

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Error: Expected non-empty Guid.

Error Number: 0x80040203

Error Message: Expected non-empty Guid.

Error Details: Expected non-empty Guid.

Source File: Not available

Line Number: Not available

Request URL: http://localhost:5555/Test/AppWebServices/SystemCustomization.asmx

Stack Trace Info: [ArgumentException: Expected non-empty Guid.

Parameter name: roleId]

[CrmArgumentException: Expected non-empty Guid.]

at Microsoft.Crm.Exceptions.ThrowIfGuidEmpty(Guid parameter, String name)

at Microsoft.Crm.ObjectModel.RoleServiceInternal`1.AddNewPrivilegesToExistingRole(Guid roleId, RolePrivilege[] privileges, ExecutionContext context)

at Microsoft.Crm.Metadata.SecurityHelper.AddPrivilegesToUserRole(RolePrivilege[] privileges, Guid[] roleTemplates, ExecutionContext context)

at Microsoft.Crm.Metadata.SecurityHelper.CreateEntityHelper(IEntityDescription entityDescription, OwnershipTypes ownershipTypeMask, ExecutionContext context)

at Microsoft.Crm.Metadata.EntityService.CreateInternal(EntityCreateInfo entityInfo, ExecutionContext context)

at Microsoft.Crm.Metadata.EntityService.Create(EntityCreateInfo entityInfo, ExecutionContext context)

at Microsoft.Crm.Metadata.EntityService.Create(EntityCreateInfo entityInfo, Guid solutionId)

at Microsoft.Crm.Application.WebServices.SystemCustomization.EntityCreate.Execute(Guid solutionId, ParameterBag paramBag)

at Microsoft.Crm.Application.WebServices.SystemCustomization.SystemCustomization.CreateEntity(XmlNode data)

Suresh