This error is due to an update that has been declined and needs to be removed but is still in the Approval state on a Group that no longer exists.
You will need to unapprove every declined update on your system. After unapproving the updates, you can then re-decline them. To unapprove all of the updates currently declined:
Select the All Updates view and set the Approval to ‘Declined’ with the status of ‘Any’. Select all updates in this list, and right click on them and choose ‘Approve…’, click on ‘All Computers’ and select ‘Not Approved’. Hit CTRL-C or click back on ‘All Computers’ and select ‘Apply to Children’. Click on OK. Re-decline them by right clicking on the selected updates and choose Decline.
WAM will now be able to remove those updates that failed before as they are no longer ‘approved’ to a Non-existant target group.