The specified user or domain group was not found.

I started getting the error "The specified user or domain group was not found" after I restored a SP 2007 site to SP 2010 with claims authentication.

The event log had the above error followed by the following error:

Object Cache: The super reader account utilized by the cache does not have sufficient permissions to SharePoint databases.

To configure the account use the following command 'stsadm -o setproperty -propertyname portalsuperreaderaccount -propertyvalue account -url webappurl'. It should be configured to be an account that has Read access to the SharePoint databases.

Additional Data:

Current default super reader account: NT AUTHORITY\LOCAL SERVICE

To fix the error I had to run the following Power shell commands:

$wa = Get-SPWebApplication -Identity "http://yourwebapp"

$wa.Properties["portalsuperuseraccount"] = "domain\cacheuser"

$wa.Properties["portalsuperreaderaccount"] = "domain\cacheuser"

$wa.Update()

SharePoint 2010 - An exception occurred when trying to issue security token.

Make sure that "Claims to Windows Token Service" is starte if you see the following error in the event log with SharePoint 2010:
Task Category: Claims Authentication
Source: SharePoint Foundation
Level: Error
EventData: The server was unable to process the request due to an internal error. For more information about the error, either turn on IncludeExceptionDetailInFaults (either from ServiceBehaviorAttribute or from the configuration behavior) on the server in order to send the exception information back to the client, or turn on tracing as per the Microsoft .NET Framework 3.0 SDK documentation and inspect the server trace logs.