I see you've already found a solution, but in case anyone else has this problem, here are two fixes:

http://buddypress.org/community/groups/how-to-and-troubleshooting/forum/topic/friendly-http-error-messages-causes-404/
http://buddypress.org/community/groups/how-to-and-troubleshooting/forum/topic/404-page-when-trying-to-create-a-group-forum/