Are you sure your Scratch Disk setting didn't change without you knowing?
There are bugs that prevent rendering and give you the wrong reason. But you'd usually get "Out of memory"; in my own experience, "insufficient disk space" usually means just that.
Copy the contents of the timeline to a brand-new, blank project file. Save that, check your Scratch Disk settings, and render. See if it works. If it does work, then you have a bug in your old project file.
If it doesn't work, set the Scratch Disk to render to your internal system drive.
Also check your System Settings to make sure you don't have "Minimum Allowable Free Space" set too high.
If even a new Scratch Disk location doesn't work, then chances are you have media in your timeline that's causing bugs. Eliminate the clips by separating the clips (including audio and graphics) out into groups and rendering piece by piece, to narrow down which clip(s) might be causing the issue.
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