I've posted a thread in ArcHydro Forum and while I'm waiting to an answer I keep looking for it in the fora. I didn't find a solution but I found people with the very same problem, from 2009 to 2012!
If we run the function from ArcHydro Tool Bar the error messages are something like this:
Flow Direction with Streams
System.NullReferenceException: Invalid pointer (Exception from HRESULT: 0x80004003 (E_POINTER)) at ESRI.ArcGIS.Geometry.MultipointClass.AddPoint(IPoint inPoint, Object& before, Object& after) at ESRI.APWR.ApHydroOp.FlowDirectionWithStreams(ApLayers apLayers, Double stepsize, Double startElevation, ITrackCancel&trackcancel, IGPMessage& messages, String& exMessage) in C:\Builds\HydroSolutions\10.0_ArcHydro\Sources\ArcHydroTools\src\ApHydro\ArcHydroOp.vb:line 3125
If we run the function from the ArcHydro Tool Box the problem, in my case, was more serious: I got a VirtualBasic C+++ runtime error saying that I was trying to run a virtual function (something that actually sounded very bad) and the ArcGIS became "non responding". Closing it with ctrl+alt+del made impossible to open the map again! Then, using ctrl+alt+del and restarting the computer I could open the map again, but got the same error message when trying to run the function from the Tool Bar (I wouldn't dare to try to run it from the ArcHydro Tool Box again!)
Someone, in 2009, complained about these awful error messages but sounded as if he had found a solution: "As this is part of the toolbox rather than the toolbar you have to run the Create Target Locations tool before it will work. Could do with a slightly more helpful error message." The ArcHydro 2.xxx... (used with ArcGIS 10) Tool Bar has a "Set Target Locations" function under ApUtilities; but the help file is not very helpful to give an idea on how to use it to solve this problem.
ANY HELP AT ALL? Thanks!!!