From the web admin panel I renamed one of our Groups which only had one person in it. Then I moved a user from another group to this renamed group. I immediately got reports from users that the Buddy List/User List was going crazy. Users were bouncing back and forth between groups and most users were in the wrong groups.
Force closing the client OutputMessenger.exe (we have "sign out" disabled) and then relaunching it worked.
Just FYI. We will avoid manipulating groups during production in the future.