I had the same problem, after installing http://www.oxygenxml.com/update/oxygenEclipse.jar (for folding problem, see http://www.oxygenxml.com/forum/ftopic781.html).

When I revert to the original oxygenEclipse.jar it works again...

I still have a problem with the folding feature in eclipse.
Folding works for files wich are in my workspace, but not with linked files.

Try this New File -> Advanced "Link to file in the file system", add file.

OS: Mac OS X 10.3