Bevin can you attach the assembly and other parts to check. Also make sure you're in component/part edit mode in the assembly (though you've stated that in the subject).
Unfortunatley, I modified the parts to avoid the need to create a cavity, and now don't have the previous version of the parts. While I could modify them to have the original sizes, I really was only seeking to learn some of the finer points of the function.
But Ihave learnt something.... an assembly file requires all the part files to load into the assembly and thus is useless without them. Sorry about that.
I did make a test assembly and the Cavity tool worked fine, so I guess my posted problem was a little more complicated.
Thanks once again Deepak.