>When issue is created with issue type Story , i cannot change the sates of workflow
Do you have "transition issue" permission in the project? If you do, then you'll need to look at the workflow itself to check the conditions on the transitions to see the rules that are blocking you from using them.
>There are no Issue Types with the Compatible field configuration and /or work flow associations.
You can't directly "edit" the issue type unless there are other issue types with a completely compatible configuration - i.e. set to use the same field config and workflows. If you want to change an issue type to an incompatible one, you have to use "move"
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