Select the clip in your project and hit Command-R. This will open the Clip Trimmer. Check that the yellow selection area is not butting up against either end of the clip. If it is, move the selection box away from the end to make room for the transition (eg. a 1 sec cross dissolve will need 1 sec of room, that is, 1 sec of available 'media' to create the transistion). You need to do this for the clips on both sides of the transition.