I'm not sure why, but the local ProjectUserAccess.xml file was out of date with the list of Observers shown in the registry and the S/R metadata. I asked server support to investigate. He removed the one user from the project that was showing as an Observer on the registry, but as removed from the project in the file. He then added him back, so the file and servers are now in sync.
Have the Observers try again to get the project. If they can't get the project, have them send a problem report - a report will give us more details about what is happening during S/R.