Looks like I finally figured out what's going on with Goblin/SH5. You can only define 2 materials for each mesh. The third material (if defined) is an opacity or something else map (not quite sure but if you define a third material that has a texture Goblin/SH5 crashes). If a third material is defined it has to have no texture and no maps.
Now that's not all. The material bindings need to be defined in the order you will be using the materials. A subset can use the same material as another subset.
Materials added to a mesh's material bindings need to have maps defined (no textures). The material can have only 1 map defined - Diffuse.
Obviously the SH5 devs didn't understand the Granny system or they imposed their own set of rules
