Is this the only resolution? I do not want Recoverable Interchange Processing facility. How do I resolve this error then?

Awesome. It worked for me! Thanks for Help.

hi, i have a problem in encounter . in first step ( in import design) encounter show: "Failed to flatten the design." and exit in encounter
please guide me

I did this but still I got the same error.

This does work. The problem with the FF disassembler is quite subtle, and only occurs when recoverable interchange processing is switched off. The problem is triggered in the CreateNonrecoverableOutputMessage method of FFDasmComp by the following line of code:
XmlReader reader1 = this.m_docspec.Parse(this.m_inputData);

The docspec reader may be invalid following a garbage collection. This problem will generally occur when some downstream component has processed a disassembled message. In essence, the FF Disassembler is not always safe to use with other components.

Switching on recoverable interchange processing is not always feasible, depending on requirements. Other options for handling this problem will involve custom code. For example, you could create a FF Disassembler wrapper component that completely disassembles the flat file into an in-memory collection and then returns each message in the collection from the GetNext() method.