This is a common issue when setting up a flow model. Stick with it, I know you can figure it out (if you haven't already!)
The issue is that solidworks can not determine which parts of your model are fluid and which are solid. Try using the "Check Geometry" button and then click "Fluid Volume" to show the fluid volume in your model, and click "Check" to show invalid contacts. This will show you what Solidworks has determined as the fluid volume, which may be different from what you think it should be. The most likely reason for this error is you have some invalid contact between surfaces in your model, or have components that are surface bodies rather than solid bodies. To get the correct fluid volume, start suppressing components in your model until you find the culprit. My guess: it's the line contact between the flap and the wing. Try adding a small offset there and you might be in business.
Thanks for your help. I checked the geometry, deleted the small control wires, and converted the asembly to a "solid asembly" and everything worked. I now have to continue tweaking the results to get the images I want to show to my students.
I wish SWx documentation and error messages explained this better.