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I turned on Tracing and this is the error log:

# CRM Tracing Version 2.0
# LocalTime: 2013-09-18 09:16:51.305
# Categories:
# CallStackOn: No
# ComputerName: CRM
# CRMVersion: 5.0.9901.0003

[2013-09-18 09:16:51.305] Process:Microsoft.Crm.Sandbox.HostService |Organization:00000000-0000-0000-0000-000000000000 |Thread:    6 |Category: ADUtility |User: 00000000-0000-0000-0000-000000000000 |Level: Error |ReqId:  | SecurityUtils.GetSidFromAD  ilOffset = 0x56
>Error while retrieving SID from GUID d06cfcf7-f7c5-4fa5-8872-084067a79ead. Exception: System.DirectoryServices.DirectoryServicesCOMException (0x80072030): There is no such object on the server.

   at System.DirectoryServices.DirectoryEntry.Bind(Boolean throwIfFail)
   at System.DirectoryServices.DirectoryEntry.Bind()
   at System.DirectoryServices.DirectoryEntry.get_AdsObject()
   at System.DirectoryServices.PropertyValueCollection.PopulateList()
   at System.DirectoryServices.PropertyValueCollection..ctor(DirectoryEntry entry, String propertyName)
   at System.DirectoryServices.PropertyCollection.get_Item(String propertyName)
   at Microsoft.Crm.SecurityUtils.GetSidFromAD(Guid objectGuid)
[2013-09-18 09:16:51.396] Process:Microsoft.Crm.Sandbox.HostService |Organization:00000000-0000-0000-0000-000000000000 |Thread:    6 |Category: Sandbox.StartStop |User: 00000000-0000-0000-0000-000000000000 |Level: Error |ReqId:  | HostService.InitializeThreadProc  ilOffset = 0x98
>System.DirectoryServices.DirectoryServicesCOMException (0x80072030): There is no such object on the server.

   at System.DirectoryServices.DirectoryEntry.Bind(Boolean throwIfFail)
   at System.DirectoryServices.DirectoryEntry.Bind()
   at System.DirectoryServices.DirectoryEntry.get_AdsObject()
   at System.DirectoryServices.PropertyValueCollection.PopulateList()
   at System.DirectoryServices.PropertyValueCollection..ctor(DirectoryEntry entry, String propertyName)
   at System.DirectoryServices.PropertyCollection.get_Item(String propertyName)
   at Microsoft.Crm.SecurityUtils.GetSidFromAD(Guid objectGuid)
   at Microsoft.Crm.Sandbox.SandboxHost.SetPrivilegeUserGroupId(Guid privilegeUserGroupId)
   at Microsoft.Crm.Sandbox.HostService.InitializeThreadProc(Object stateInfo)
[2013-09-18 09:16:51.405] Process:Microsoft.Crm.Sandbox.HostService |Organization:00000000-0000-0000-0000-000000000000 |Thread:    6 |Category: Sandbox.StartStop |User: 00000000-0000-0000-0000-000000000000 |Level: Error |ReqId:  | HostService.InitializeThreadProc  ilOffset = 0x98
>HostServiceProgram.UnhandledExceptionHandler: enter
[2013-09-18 09:16:51.405] Process:Microsoft.Crm.Sandbox.HostService |Organization:00000000-0000-0000-0000-000000000000 |Thread:    6 |Category: Sandbox.StartStop |User: 00000000-0000-0000-0000-000000000000 |Level: Error |ReqId:  | HostServiceProgram.UnhandledExceptionHandler  ilOffset = 0x30
>System.DirectoryServices.DirectoryServicesCOMException (0x80072030): There is no such object on the server.

   at System.DirectoryServices.DirectoryEntry.Bind(Boolean throwIfFail)
   at System.DirectoryServices.DirectoryEntry.Bind()
   at System.DirectoryServices.DirectoryEntry.get_AdsObject()
   at System.DirectoryServices.PropertyValueCollection.PopulateList()
   at System.DirectoryServices.PropertyValueCollection..ctor(DirectoryEntry entry, String propertyName)
   at System.DirectoryServices.PropertyCollection.get_Item(String propertyName)
   at Microsoft.Crm.SecurityUtils.GetSidFromAD(Guid objectGuid)
   at Microsoft.Crm.Sandbox.SandboxHost.SetPrivilegeUserGroupId(Guid privilegeUserGroupId)
   at Microsoft.Crm.Sandbox.HostService.InitializeThreadProc(Object stateInfo)
   at System.Threading.ExecutionContext.Run(ExecutionContext executionContext, ContextCallback callback, Object state, Boolean ignoreSyncCtx)
   at System.Threading.QueueUserWorkItemCallback.System.Threading.IThreadPoolWorkItem.ExecuteWorkItem()
   at System.Threading.ThreadPoolWorkQueue.Dispatch()
   at System.Threading._ThreadPoolWaitCallback.PerformWaitCallback()