Curved Solid subtract problem

[Box]

Looks like you are running into the Tiny Face issue.
Have a look here.

The Dave Method

The Dave Method is the clever use of components popularized by @DaveR to avoid the tiny face issue. Sketchup fails to form faces when edge segments get down around the 1/1000" mark. However, tiny faces can exist so the workaround has generally been to scale up your geometry, edit it, then scale back down. This works, but can lead to some issues. The Dave Method leverages the power of components to make life easier. The basic concept is, you start with a component set at the size you want, t…