Problem: I get the following error (below) whenever trying to modify a distribution group in Outlook 2010. I can do it in OWA but not Outlook 2010 while running Exchange Server 2010 SP2. Tried it as the owner and domain admin without any luck.
Solution: Go into Domain Users and Computers, find the distribution group and make it universal instead of global. After that, I was able to edit it within Outlook 2010 without any issue.