I'm also trying to test in the iOS simulator and I'm getting the exact same error. Were you able to figure it out or maybe somebody else can help us?
In my case, I was using adt with "-target ipa-test-interpreter-simulator" and "-platformsdk /Applications/Xcode.app/Contents/Developer/Platforms/iPhoneOS.platform/Developer/SDKs/iPh oneOS7.1.sdk". It worked after changing the latter to "-platformsdk /Applications/Xcode.app/Contents/Developer/Platforms/iPhoneSimulator.platform/Developer/S DKs/iPhoneSimulator7.1.sdk".
I am also having the same problem, i am trying to load an swf in fla it works just fine in Adobe Air Desktop and Mobile preview but it gives this error above when i try to test it on iphone simulator and on iPad it works but shows blank screen.
I still get this error. tested with Air 184.108.40.2062 & 220.127.116.11 (same on both)
app runs fine on device, using SDK 8.3
have no Additional ADT options