Unable to MERGE-Err Msg "MDM Server Failed to Merge the Selected Records"

Hi Friends,
I am using a Match Strategy in the Workflow. In the START Process of the workflow I CHECK OUT the records. In the step MATCH / MERGE when I try to MERGE similar records I get the Error Message "MDM Server Failed to Merge the Selected Records".
But the same step works fine when I dont CHECK OUT (CHECK OUT = NO) the records in the START STEP. But this would not be the right way to do it, as the incoming duplicate records would be visible in the Data Manager by other users even before it is merged.
Your inputs would be greatly appreciated to tackle this problem.
Thanks.

Hi Ravi,
The workflow steps are as follows: (I am on MDM 5.5 and SP 6)
Start (Check Out)   -
> Process -
> Validate -
> Match    (Manual Merge)   -
> Approve----
> Stop    (Check In)
                                                                                The Match and Merge step is a Manual step in the Workflow.
I Check out the records when i start the Workflow and Once the entire process is complete I check in the record. What is happening is that it does not allow me to Merge the records and I get the Error message.
If i dont Check out the Incoming records and run the workflow it Merges fine. But this would not be correct as the Incoming records(whihc could be duplicates) would be visible in the system until they are merged.
Your Input woould be greatly appreciated.
Thanks in Advance.

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