This is exactly my problem since I switched to WP 3.4. Funny enough, though, the error message only displays when using the live installation on my webhoster’s servers. When I log in to my local Xampp installation, everything is fine.
There is no known solution for this. I opened a ticked on the WordPress Trac and what they did was change how the error message is displayed.
I’ve worked on this for hours and hours. It basically comes down to, I think, the way that Google is reading your network activity on your site. If it deems the site as “too heavy”… it will block that feed url.
I put in a request to Google about a week ago to have this looked at… but haven’t heard anything back from them.
I think this is something we are just going to have to accept.
My advice… use the screen options to hide that particular widget altogether. Yes, it would be a nice feature. But do you HAVE to have it… absolutely not.