Answer
In versions of ArcGIS prior to 9.0, only 50 temporary grids can be created within a Visual Basic subroutine. This limit can be lower if users have a number of other open grids. This limit is removed at ArcGIS 9.0.
As a workaround for versions of ArcGIS prior to 9.0, save some of the temporary grids to disk, set the temporary grid objects to nothing and open the grids when they need to be accessed.