This was one of those tough to track down issues that yielded very little in terms of actionable solutions vs. confirmation of similar problems while I Googled the problem symptoms.  I recently upgraded a Grails app from Weblogic 8 to 10.3. The app allowed users to upload videos to Youtube using the Youtube APIs, using ClientLogin for authentication. The problem was after the upgrade the connection to https://www.google.com/accounts/ClientLogin was failing during the SSL negotiation phase.  The errors in the log were

java.lang.IllegalStateException: Cipher not initialized
at javax.crypto.Cipher.c(DashoA13*..)
at javax.crypto.Cipher.update(DashoA13*..)
at com.certicom.tls.provider.Cipher.update(Unknown Source)
…

and

java.security.InvalidKeyException: Illegal key size

Thankfully I found this thread on a Korean Oracle forum. The solution is to add this JVM parameter:

-Dweblogic.security.SSL.nojce=true

This enables Weblogic to use a FIPS 140-2 compliant crypto module in the server’s SSL implementation.  FIPS 140-2 is a standard that describes U.S. Federal government requirements for sensitive, but unclassified use.

If you have this problem, I hope you stumble upon this post and it helps you.