Actually, I was wrong. I thought maybe it was rejecting all teh retrofits because you were doing too many at once and the total amount was more then you could afford. But I tested it out and that's not the problem.
I also tried as Slick suggested and took the original design and upgraded it to a completely new design thinking that maybe it was corrupted or something. No joy.
It's definetly reproducable, but it doesn't seem to make any sense. I have emailed the files to Aaron along with a description of what I tried to workaround it. Maybe he can fix it for the next patch if nothign else.
Geoschmo