Make sure that the location the STEP file you are trying to open is writeable and has suficient space. The translator needs to write files to that location and if it can't, you get that response.
I think you can also override the default output folder so you might check that if you haven't. Aside from that, I have no idea.
I think I've got this one solved. The files I was trying to translate were downloaded from the Internet to my Downloads folder. When checking the properties on the Downloads folder I noticed the Read-only (Only applies to to files in folder) box was filled in, not checked. I cleared the box, saved the file to my desktop and was able to translate the files successfully. Thanks for your assistance.
I downloaded some more files today and ran into the same issue. Interestingly, I was able to translate the file as a part but got the same error message if I tried to translate it as an assembly.
Yea, I don't believe Part has to write out files during the translation.