So Im modifying Navigation and decide to limit a particular item to an Audience. In the Audience field, I type "Approvers". It is returned as not found, what with the red squiggle and all. I use the Browse to locate the group. Clicking that little icon brings up the "Select Audiences" window. I flip the "Find" lookup to "SharePoint Groups" and type in "Approvers". There it is. I select it and click "Add" at the bottom, and click "OK". And back on the "Navigation Link" window, the "Audience" field shows the Red Squiggle of Death for the Audience.
The "Approvers" group is right there, but showing as not found, when it was listed in the Browse! What gives? Btw, this is for SP2010.