Got this error after adding an attribute to a dimension.
Looking closely at the dimension and then straight in the SQL server found out that it had two values possible for no value:
'NULL' and '' (empty string).
Solution: making sure all the "unknown" were the same (I choose and empty string) fixed the issue and the dimension was processed successfully.
A different solution: wasn't a time out, it was the "warning" at the end of the dimension processing error message, and the details are below: