I have been reconfiguring a search index and running into this issue a lot, so I thought I would post on it. In my case, I am crawling a content source that comes from a BDC application definition. The first time I crawl, I get the following error.
The parameter is incorrect. (LobSystemInstance could not be found using criteria 'Name=MyBDCInstance'.)
This is obviously a cryptic error. As I have said in the past though, if you get an error crawling, always try to crawl again. In this case, this is exactly the fix for it. Full Crawl again and everything works just fine. I am sure there is a good reason this happens, but I have never bothered to look into it. If you get the error, just crawl again.