I've been getting the same error, provoked by typing any three
characters into the "email to:" field. Both typical and advanced
rebuilds of the database didn't solve the problem.
I tried setting up a new identity, to at least see if I could import
my contacts and access them (you know, because in the middle of
debugging, I still had to get work done!). Light began to dawn when
during the contact import process, some of the Entourage dialogs
displayed funny--the instructions and other text in the dialog was too
big, and overflowed the borders. Sure enough, even this empty
Entourage identity, with no emails and no contacts ALSO got Error
-8796 when typing any three characters in the "email to:" field.
I believe that Error -8976, at least in my case, represented a font
problem. Which didn't surprise me, because I'd long suspected I was
due for one, having dutifully followed instructions with Extensis
Suitcase X11 and turned on "Manage System Fonts". Ever since then,
various programs have seemed unstable. (The whole concept of a 21st
century OS being brought to its knees by font problems is a whole
other topic...)
I did a fresh install of Panther on a separate partition, and then
booted into OS 9 (to circumvent permissions and "file in use"
problems). I copied the contents of System/Library/Fonts and
Library/Fonts from the brand-new install into my working system
folder.
After rebooting, not only does Entourage work, but even the old
database files (before rebuilding) now miraculously works.
Warning: Of course, tampering with system fonts is asking for trouble,
and you could easily wreck things. I'd like to think what I did,
though, was to undo the problems caused by letting Suitcase X11 do its
own unsupervised fiddling with the same font folders.
By the way, if you get out of your current Entourage mess, my advice
is to keep frequent backups of the database file, regularly export
contacts, and archive old email. All of us probably rely on Entourage
to manage a lot of critical information, and being without it is a
killer.