Did you assign Project Manufacturing parameters to the Project
Project Manufacturing>Project Definition>Project Parameters> assign the right inventory org to the Project
Yes . This is already done.
Do they both belong to the same Org (Inv & Project)?
On PO verify the destination organization is the same as the PJM organization.
Verify the project is assigned to the PJM organization using the form - Assign Project Parameters, on teh PJM organization.
in PJM Org, have you assigned any other projects?
On the PO distribution , are you able to see any other project in the LOV?
Check the project status? does this status alow creating new transactions?