A strange error

That's an error, it should say it must match the clock signal driving the cpu.

We run the Nios through a PLL all the time. So bumping to 40 , 60, 80, or 100 MHz should be no problem from your 20 MHz source.

Just for grins I would just switch the setting to 20.1 MHz and see if it builds. I never hit that before, but it sounds like someone in the software land should have had made it the limit >= instead of just >.

Pete