Orders.php status not updating internal server error

[brain404]

In admin/orders.php and trying to update the order status I'm getting an Internal Server Error. This happens if I have the "Notify Customer" box checked. If I uncheck the box it works fine. Even when I get the internal server error, it will still update the order at the top but not in the order history. If I uncheck the box everything updates correctly but no email is sent. I've also noticed in the email the order status isn't listed.

 

Any help with this would be appreciated. I've been at this for over a week and haven't found a solution to it. :'(