Yep, this happens to me constantly. It also randomly withdraws another knife once in a while.
I managed this though:
|+||+||+||+|+|+|+||+||+||+||+||+||+||+||+||+||+||+ ||+||+||+|
|+| Viper Cutter[v1.1] |+|
|+| Thanks For Using Viper Cutter..Please Post Proggies. |+|
|+||+||+||+||+||+||+||+||+||+||+||+||+||+||+||+||+ ||+||+||+|
|+| *Worked For: 3 Hours, 14 Minutes and 45 Seconds.
|+| *Did: 156/10000 Loads. *Made: 4212 Yew Longbows(u).
|+| *Slept: 6 Time[s]. Sleeping Every 25 Loads.
|+| *Antibans Preformed: 2034. *Checked for Randoms: 1540 Times.
|+| http://www.villavu.com/forum/showthread.php?p=569026
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No Knife, Dont worry... Banking for one
Could not find bank, trying again
Player is not Active...
NextPlayer(Active: False);
This is the common error message that I get almost every time. Though this time I was in the gravedigger random and I had 2 knifes in my inventory at the time.

