Update with subquery runs in one statement but not in another on SQL 2005  64 bit EE

We are migrating to SQL 2005 64 bit edition.  I ran one of our SPs & got the following error message:

OLE DB provider "SQLNCLI" for linked server "Rbcweb" returned message "Cannot create new connection because in manual or distributed transaction mode.".

Msg 7320, Level 16, State 2, Line 1

Cannot execute the query "SELECT TOP 1 1 FROM "heat"."heat"."Profile" "Tbl1005" WHERE CONVERT(int,"Tbl1005"."CustID",0) IS NULL" against OLE DB provider "SQLNCLI" for linked server "Rbcweb".

Here is the statement that is generating the error:

print '*** Update Inactive entries in the HeatCustomerDim table ***'
Update HeatCustomerDim
Set CurrentCustomerStatus = 'Inactive'
From HeatCustomerDim
Where CurrentCustomerStatus = 'Active' and
HeatCustomerKey NOT IN (Select CustId From Rbcweb.heat.heat.Profile)

The linked server is setup correctly.  The weird thing is that I do almost the exact same thing a few lines above this statement within the same SP & it works.  I then do the same thing after this SP.  Here is a statement that works:

print '*** Reactivate customer entries in the HeatCustomerDim table ***'
Update HeatCustomerDim
Set CurrentCustomerStatus = 'Active'
From HeatCustomerDim
Where CurrentCustomerStatus = 'InActive' and
HeatCustomerKey IN (Select CustId From Rbcweb.heat.heat.Profile)

The only difference is this statment doesn't contain the NOT keyword.  I haven't been able to find anything that has changed with the NOT keyword in SQL 2005.  Has anyone else run into this problem so can see what I might be doing wrong?

THanks!
John
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