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Why don't groups work in Apple mail now?

After upgrading to Lion and moving to icloud I am unable to sent an email to a Contacts Group. I type in the first few characters of the group name and Apple Mail finds it and fills it in, but as soon as I hit return or Tab or whatever to move to the next field, the name disappears from the "To:" block and I am left with a blank email.

The group I am trying to send email to shows up in my Address book with the members I put into it, so it looks o.k. on the Address Book side.