SSIS Sql Agent Run As Proxy Error

I'm attempting to run a ssis package via sql server agent.

The package and the DB are on a cluster.

The package runs fine when 'Sql Server Agent' is the run-as.

When I try and use a proxy to run the package, it fails with this error:

Date 5/28/2008 6:21:54 PM
Log SQL Agent (Current - 5/28/2008 6:21:00 PM)
Message
[136] Job CorpFoo New reported: The process could not be created for step 1 of job 0xDAE2A53F27943D4CA412A0D177CAA546 (reason: A required privilege is not held by the client)


I've:
Create Credential to be used by proxy
Create Proxy
Give Permissions to Proxy in SQL Server
Give Permissions to Proxy at the Server for SQL Agent Batch Run
Give Permissions to Proxy at the Server to Connect to SSIS

EXEC dbo.sp_grant_login_to_proxy
@login_name = N'Myapplication_DBO',
@proxy_name = N'Myapplication_Batch_PROXY' ;


EXEC dbo.sp_grant_proxy_to_subsystem
@proxy_name = 'Myapplication_Batch_PROXY',
@subsystem_id = 11;


I've tried a number of things, including adding the sql user (who has access to the proxy) as sys admin on SQL and the OS. That didn't help either.

Has anyone experienced this error? Is there any way to further diagnose this (completely unhelpful) error message?

Thanks,

Steve.