Solution
Check if the path stored in the following registry keys is correct.
AutoCAD Mechanical 2010
Registry Key:
HKEY_CURRENT_USER\Software\Autodesk\AutoCAD\R18.0\ACAD-8005:xxx\Profiles\<<Profile Name>>\Acadm\Preferences\Data\gen\Paths\PublicPath
Default correct path:
Windows XP
c:\documents and settings\all users\documents\autodesk\acadm 2010
Windows Vista & Windows 7
c:\users\public\documents\autodesk\acadm 2010
AutoCAD Mechanical 2011
Registry Key:
HKEY_CURRENT_USER\Software\Autodesk\AutoCAD\R18.1\ACAD-9005:xxx\Profiles\<<Profile Name>>\Acadm\Preferences\Data\gen\Paths\PublicPath
Default correct path:
Windows XP
c:\documents and settings\all users\documents\autodesk\acadm 2011
Windows Vista & Windows 7
c:\users\public\documents\autodesk\acadm 2011
AutoCAD Mechanical 2012
Registry Key:
HKEY_CURRENT_USER\Software\Autodesk\AutoCAD\R18.2\ACAD-A005:xxx\Profiles\<<Profile Name>>\Acadm\Preferences\Data\gen\Paths\PublicPath
Default correct path:
Windows XP
c:\documents and settings\all users\documents\autodesk\autocad mechanical 2012
Windows Vista & Windows 7
c:\users\public\documents\autodesk\autocad mechanical 2012
The “xxx” in the registry key above depends on the language of the product. For instance, for English xxx = 409.
<<Profile Name>> is the name of the profile you use. By default is <<ACADMPP>>.
If the path stored in the registry key is correct, the issue may be caused by corrupt files under the VAL folder. There should be four subfolders in this location as shown in the picture below. If some of those files from the VAL folder are missing, corrupted or you do not have access to them, then you will see this issue. You need to replace them with the correct ones from another working installation.

The VAL folder path is the following:
AutoCAD Mechanical 2010
Windows XP
C:\Documents and Settings\All Users\Documents\Autodesk\ACADM 2010 \Acadm\Gen\Val
Windows Vista & Windows 7
C:\Users\Public\Documents\Autodesk\ACADM 2010 \Acadm\Gen\Val
AutoCAD Mechanical 2011
Windows XP
C:\Documents and Settings\All Users\Documents\Autodesk\ACADM 2011 \ACADM\Gen\Val
Windows Vista & Windows 7
C:\Users\Public\Documents\Autodesk\ACADM 2011 \ACADM\Gen\Val
AutoCAD Mechanical 2012
Windows XP
C:\Documents and Settings\All Users\Documents\Autodesk\ AutoCAD Mechanical 2012\ACADM\Gen\Val
Windows Vista & Windows 7
C:\Users\Public\Documents\Autodesk\AutoCAD Mechanical 2012\ACADM\Gen\Val
Warning! Problems caused by improperly editing the Windows registry could render your computer operating system unusable. Microsoft provides a wealth of critical information that you need to know about the registry in the Microsoft Knowledge Base.
Use the Microsoft® Registry Editor only at your own risk and only after backing up the registry as well as the system.dat and user.dat files as outlined for your operating system in the Microsoft Knowledge Base and in the related Autodesk solution, TS66513 (http://support.autodesk.com/getdoc.asp?id=TS66513). Additional information about the registry is also contained in the Help topics in the Microsoft Registry Editor.