I had the same thing happen...backup failed. I can't remember what it said exactly, but it referred me to a bit.ly url that was broken. Nice, huh?
After googling, I found someone that had run into the same prob as me. In rom manager, they (at the recommendation of the broken bit.ly link) repaired permissions and re-booted. That did nothing for me.
But I also found another forum that said choose the 'reboot into recovery' option. I tried that. Got the recovery screen, exited recovery, and the phone started up. Then I chose backup current rom, and it worked.
I feel sorta bulletproof now.
But, be aware the backup you'll make is of a rooted phone. Same as mine. Just so ya know.
djembeman...r u in Idaho?