Is it really a true intersection, not just an apparent intersection (overlapping lines in 3D)? Try the APPINT osnap.

Three reason :

Thanks.

Not quite.  There seems to be some bug in the program, as the problem is not consistent and only occurs occasionally and with no apparent reason.  All the above suggested options has been considered and the problem persists.
No big deal.  I can deal with it in my own way - just an annoying glitch.

Thanks again for your concern and help.

Daniel

hey there, hope this answer your inquiry:
First you have to checked your UCS;
>type UCS
>hit the enter or space bar
>type W (World)
>hit the enter of space bar

and now it is set for UCS World

Second you have to check your object(Line, etc.) whether the Z-axis is set to zero (o) or not
> by simply selecting an object or line etc (highlight it)
>press Ctrl + 1 : A properties will come out
same command line is : "MO" and hit enter its the same command will come out
Note: A pop-up window of PROPERTIES will come out.
> try to check in GEOMETRY
>"End Z" and "Delta Z" SHOULD BE ZERO
Note: By left click on the dialog box beside "End Z" or "Delta Z" type 0 to set all in one plane.

Note: Always check all Geometry Object or Lines, "Z SHOULD BE ZERO". so that all you want for osnap is present in 2d.

Hope this Help my Friend..