Unexpected task bar behaviour

I have an app that streams realtime data from an out-of-process COM
server by accessing the server on a 1Hz timer. If I right click on the
apps 'button' on the task bar the following happens.....

a) the task menu is only part painted (no text)

b) the call to the server causes the following exception.....
'An outgoing call cannot be made since the application is dispatching an
input synchronous call'
This exception then popped on every timer tick.

c) the app can be shut down cleanly from Task Manager.

d) the server seems unaffected.

This behaviour occurs with W98 but not 2K (several machines with each OS

Can anyone shed any light on this one?