Hi Lokanath,
Based on my experience, if you encounter such issue suddenly, there may be two reasons:
1. The defect of the workflow.
2. SharePoint Online maintenance or Service Upgrade.
For the first reason, it may be related the empty of the lookup value. Here is an related link for your reference: http://social.msdn.microsoft.com/Forums/da-DK/sharepointcustomizationprevious/thread/ac6913c4-396b-4e7c-a42f-ee78656c7532.
For the second reason, please go to the Service Health and Planned Maintenance sections in the Office 365 portal to check if there is some related information.
Thanks,
Eben Liu