Hi,
Based on the FWSTrace log snippet that you provided, it seems the policy server experience some problem when try to generate assertion. Policy server trace log will give more hints on why this happen. We can match the transaction id in the FWSTrace log to policy server trace log. I suspect is something related to certificate in the IDP.
Check following KB if that applicable to your case.
AuthnRequest sign verification issue
Hope that helps
Regards,
Kar Meng