I just upgraded from 1.1.4 to 1.1.6, and now I’m getting this same exact problem. You would think it would have been fixed in 1.1.6. See the screen shot.
The fix earlier in this post fixed the problem fro me.
I just upgraded to 1.1.6 from 1.1.5 and I’m still getting the following error:
“This shipping method is currently unavailable. If you would like us to ship using this shipping method, please contact us.”
Country of origin: Outside USA
Apparently the fix is available on this forum since a long time but I don’t know why the Magento team did not implement the neccessary fixes in the upgrades.
This is really a sad reflection on the QA that takes place for the product. How could this have slipped past the Magento team if the release were properly tested?