Ok I'm back, 

@alan @Drphibes the issue is that the federal e-file requires the Armed forces checkbox to pass validation. California requires a copy of the Federal return in xml format and that it pass validation at their center. Since the Federal will always fail, and California always requires the Federal be attached and pass validation, a CA return with the 3903 will always fail. The federal schema was updated this year to require that checkbox, which is why you are seeing this and haven't had the issue in the past. 

Hope this helps clear up why you are required to paper file unlike prior years. 

-Betty Jo