with apologies to Kathy Sierra...
http://joshwand.com/files/ohcrap2.png
I've had this experience with several of my startup ideas now... I learn more and more about a given problem space/market, and eventually I start feeling like I have a decent grasp of the situation. The new learning tapers off, until one day, I discover a whole new dimension I've never thought of, and I realize just how little I know about the problem.
I've come to expect a few of these "oh crap" moments early on, but I wonder what conclusions I should draw from these moments later on in the process? They tend to be rather discouraging, as plans need to be modified/rethought, and sometimes the viability of the entire project comes into question, as when you discover that there are a whole slew of other startups trying to solve the same problem as you, all of them further along than you are!
I wonder if sometimes it's worth ignoring the extra information entirely, and solving a simpler version of the problem instead? The extra information might not even be relevant if the project doesn't expand in that particular direction. EDIT: this doesn't apply as easily to the situation where you discover your competition...
Does anyone else experience these moments, and what have you learned from them?
UPDATE: added axes/legend to graph
You don't always have that luxury, of course - some problems don't necessarily have a simple solution. But for me, when things get complicated I take it as a sign that I've taken a wrong turn somewhere.
I'm not sure if this actually answers your question. ;)