File writing permission seem to arise when users attempt to read/write to non-C:\ drive locations. LaWen had a recent issue where she had her DEM in D:\ but was writing outputs to C:\ and something caused the momentum solver to fail. It looks like a (suspected) permissions issue caused SampleRawOutput to return false, triggering multiple rounds of terrain smoothing and eventual failure.
Console output with CPL_DEBUG=ON attached.
console-output.txt