I have isolated problem to some audio clips that producer gave me which I converted to AIF format (using QT 7) and did some tweaking in Audition.
Will experiment to isolate why these clips got problem converting to AAF.
Audition saved clips in either Mono Mono or Stereo does not convert to AAF. I used QT 7 to re-export the AIFF (which is already in Stereo) to Stereo again without changing any settings. This updated clip is able to convert to AAF without errors.
Solution is to re-export problematic audio clips using QT 7 and replacing the problem ones without changing the clip name. Then go to FCP X to export XML again.