I'v noticed that quite a lot of people suffering form the same problem and the solution scenarios are hard to find among the flood of different threads. So here is what I figured out while my Lion Server Services where down for a whole day:
Wiki > "Error reading settings"
Profile Manaher > "Error reading settings"
Services won't start. When trying to look up the Wiki startpage in a browser it only shows "Server Error"
Here is what I found out. Use Terminal.app (be careful if you don't know what your'e doing)
Enter the following command in the terminal window: sudo serveradmin stopp postgres
You will be prompted to enter your password.
Terminal will then prompt with: postgres:state = "STOPPED"
After that try to restart PostgreSQL: sudo serveradmin start postgres
You might get this return: postgres:state = "RUNNING"
Everything is OK with PostgreSQL and you don't have to follow the folling procedure
If you get the following: postgres:error = "CANNOT_START_SERVICE_TIMEOUT_ERR"
You need to look up the system log in order to find out where restarting PostgreSQL is stalling out.
Enter the following in Terminal: cat /var/log/system.log
A long log file will show up in the terminal window. Look for error related to the location where your wiki data is stored. In my case that was (Mac Mini) that was Macinthosh HD2. Look for a file where the log tis telling you that it has to many rights (group or world access) and an error note telling you that the rights should be 0700 (instead it is 0770 or similar).
If you found the specific file perform a chmod in terminal changing the rights of that file to 700
Terminal: sudo chmod 700 (pointing to the file you spotted in the log)
Now restart PostgreSQL: sudo serveradmin start postgres
You're done if you get the prompt: postgres:state = "RUNNING"
After that, your wiki and profile-manager should come to life again (after a short moment, allow them 30 sec. or 1 minute to recover)
Hope you can do the trick, and always remember: PostgreSQL Service is essential for all collaboration services of Mac OS Lion Server. For security reasons PostgreSQL refuses to start if the rights are not set restrictive. This is resulting in "Error reading settings" for Wiki and Profile-Manager and causes some of the other services to behave starange.