Unable to send message: In local permit/deny – Pidgin/GAIM/etc

I ran into an issue with Pidgin where I started noticing some users weren’t showing up as online for a long period of time.  I set it to allow to send to offline contacts, and tried to send to someone I knew was online.  It gave me the error:

Unable to send message: In local permit/deny

I fixed this by blocking the user, and then unblocking him.  Hope this helps for you as well.