I’ve tried this. Installed the modules and then I get with
\definemeasure[CAindent][12pt]
\setupindenting[yes,\measure{CAindent}]
% Every chapter body text starts with a drop cap:
\usemodule[lettrine]
\setuplettrine[Lines=3,
Hang=.5,
Oversize=0,
Raise=0,
Findent=0pt,
Nindent=0em,
Slope=0em,
Ante=,
FontHook=,
TextFont=\sc,
Image=no]
\starttext
\lettrine{S}{\kap{\bf uppose we}} have a system for the approval of
loans. \input knuth
\stoptext
tex error > tex error on line 19 in file ./test.tex: Undefined control sequence
<macro> \m_syst_parameter_n ... \the \LettrineHeight ] X}}\scratchcounter = \numexpr (100*\LettrineHeight )/(\ht \Lettrinetbox /100) - 9999\relax \ifnum \scratchcounter >0 \def \tempa {1.\the \scratchcounter }\else \def \tempa {1}\fi \LettrineFontHook \!!dimena
= \tempa \Let...
<macro> \dolettrine ...\Lettrinefindent =\LettrineFindent \relax \Lettrinelines =\LettrineLines \relax \setbox \Lettrinelbox \hbox {{\ifx \LettrineImage \v!yes \doLettrineEPS {#2}\else \ifx \LettrineImage \v!true \doLettrineEPS {#2}\else \doLettrineFont
#2\fi \fi }}\...
<line 4.19> \lettrine{S}{\kap{\bf uppose we}}
have a system for the approval of
9 Raise=0,
10 Findent=0pt,
11 Nindent=0em,
12 Slope=0em,
13 Ante=,
14 FontHook=,
15 TextFont=\sc,
16 Image=no]
17
18 \starttext
19 >> \lettrine{S}{\kap{\bf uppose we}} have a system for the approval of
20 loans. \input knuth
21 \stoptext
22
The control sequence at the end of the top line of your error message was never
\def'ed. You can just continue as I'll forget about whatever was undefined.
mtx-context | fatal error: return code: 256