User is using CRM 2011 Outlook Client for CRM 2011 on premise.  Attempting to set regarding an email from an outside contact to an existing CRM custom entity record.

Issue is they receive a generic error "An error occurred promiting this item to Microsoft Dynamics CRM.  The Microsfot Dyanmics CRM server could not be contacted or the user has insufficient permissions to perform this action".

I don't have a trace file.  I asked for a copy of the email that they are attempting to set regarding and it was linked to the record in question. Not sure if it still tracked to the correct record despite the error message (user states error message also causes Outlook to crash). 

I looked at the email activity in the record and the sender's email address is in red and not found in CRM.  The sender is listed as a contact in CRM but the email address for the contact record is different than what was received in the email.  Could this be the cause of error/crash?  If so, what is the workaround (if assuming the email address in CRM is the correct one and perhaps the contact emailed using a secondary account).