[Brian]

If you specify a type for subgroup_list (change that line to "every group as list") your existing script won't throw that error. (at least on my 10.5.6 box, it doesn't.)

Since you're asking the canvas for a list of the groups that it contains, you're only getting the top level groups that are actually owned by the canvas.

We're quickly reaching the upper limit of my AppleScript knowledge, but it sounds like you want to ask each group if it contains any subgroups, then gather info on them as appropriate.