It was HP protection tools software which was the problem. i just uninstalled it.
good news that you found it! The line in the log was
2011-4-15 9:21:39,409 WARNING MfeEpeCoreEncryptionPlugin ..\..\..\Src\EpeEsActivationHandler.cpp: EPEES_activation_handler::has_incompatible_products: 393: Incompatible product found: HP ProtectTools FVE SafeBoot
You can find it easily with the EPELogReader available on http://mcaf.ee/simon - I know the EPE log is tiresome to wade through.