Faced this error already several times when I was playing with processing algorithms:
I used hi-res DSM/DEMs out of UAV surveys.
Resolution between 2,5 - 5 cm GSD. Output format: .tif
Any ideas how to fix it?
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Based on your question and input from The following layers were not correctly generated. Grid
there is likely something wrong with the path that you used to save the file in.
Like what worked, you can choose to use the "[Save to temporary file]" option.
Or you may want to work with a folder that has no spaces in it. For example: "C:\GIS".