OK Guys - I finally fixed the problem. In fact there was a related issue in that the event was flagged with a cautionary triangle, and when I went to export the project I would get this warning message "<project> has missing or offline titles, effects or generators." SO I was guessing I had a bigger issue on my hands.
I tried all the usual suspects, ie trash prefs and CurrentVersion.flexolibrary etc etc, but to no avail. I checked the timeline index and more, but could not find any missing title, effect or generator. Then I stumbled on this:
Re: how do you find missing titles, effects, and generators in final cut pro x?
Simply creating a new blank event, and a new project into that event, then copying the timeline (CMD-A, CMD-C) from my "corrupt" project in the new clean blank project (CMD-A), and voila, the yellow triangle is no longer flagging the event and now I can create snapshots again.
Of course I still have the triangle warning on the back up events, but I just ignore these now so long as the current event where I store my current projects and most recent snapshots is OK, then I'm a happy camper.