Credit to the Blinkbox help site for this. I just purchased a Chromecast to link up with my Nexus 7 running 4.4.4. Annoyingly when I tried to cast a YouTube video I got an error occurred message. Fruitless reboots and power-off’s later I eventually stumbled across the solution – my BT HomeHub 5 has a Smart Setup enabled by default under Advanced Settings | Home Network | Smart Setup. Turn this off and it all worked.
This altered by understanding of the Chromecast devices, I had assumed it was a pure TCP/UDP transmission of the video across the local network. The implication is that the Nexus is acting as a remote control device similar to the DLNA device types and the Chromecast is streaming the content from the Internet itself.
It’s still annoying that individual apps have to be Chromecast enabled, the is a mirror screen option but it looks like my first generation Nexus 7 doesn’t support it even thought it’s present under Settings | Display.