Not necessarily. You can scan disk for reading from HD utilities on BartPE CD. That should tell you if disk has sector reading errors.
If that comes out clean, try Emergency Boot.
Maybe SBFS was just moved by non-compliant defragmenter....
Just had this issue myself. Machine was displaying this error on bootup. Used SafeTech to do an emergency boot. Interesting thing was that when using "Authenticate from SBFS" it failed with this error again. When using "Authenticate from Database" and pointing to the SDB file Emergency Boot completed and booted to Windows.
It's just literally happened. On Synch, it did appear to repair SBFS and then encryption changed from Full to In Progress. We're going to let it finish, synch again and then reboot to see what happens. I'm expecting the SbClientLog later from the machine. This machine was very recently upgraded from v4 to v5.
Probably unrelated but engineer also noticed that keyboard is not responding properly on this machine (had great difficulty entering the SafeTech code correctly).
Will update with further findings.
Ah.....the reason it went from Full to In Progress is because the support team set the object to remove, so that when SB was Safetech removed it wouldn't reinstall a default install. Doh. They weren't expecting him to Emergency Boot it successfully.
So I will wait for decrypt and removal and get the log files (if Desktop engineer remembers to send them to me before SB removes it's client files!). Might be none the wiser on this one..... Hoping it's a one-off due to some unusual utility on the machine or something.