Features disappear after performing a geographic (datum) transformation in the Project Tool

Description

** This issue is addressed in ArcGIS 9.0 Service Pack 3 (SP3) **

When using the Feature Project Tool in ArcToolbox, features at the edges of the data extent disappear and are not reprojected.

The reprojection includes a geographic (datum) transformation. A geographic transformation occurs when the input and output geographic coordinate systems differ. The input and output coordinate systems may be projected, as a geographic coordinate system is contained with a projected coordinate system.

Cause

When calculating the output xy domain, the geographic (datum) transformation was not used. This means that the output xy domain may not be large enough to contain all the features after the reprojection. Features that touch or cross outside the xy domain are not reprojected.

Workaround

1. Add the feature class to ArcMap.
2. Set the data frame's coordinate system to the desired output coordinate system. Right click the feature service, select properties & select the Coordinate System tab. Use the Transformations button to set the appropriate geographic (datum) transformation. Once finished, OK all dialogs.
3. Right click on the layer in the table of contents and select Data, Export Data. In this dialog, set the radio button to the second option, "Use the same coordinate system as the data frame".
4. Set the path and name of the output feature class and OK the dialog.