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The mimemail module causes errors in the flag module because it fails to specify triggers in mimemail_rules_action_info. According to the documentation for hook_action_info, the 'triggers' key is required. See this comment from the author of the flag module saying that he does not consider this to be a bug in that module.
Add 'triggers' => array('any') to mimemail_rules_action_info.
Will attach my patch but needs testing.