This has happened to me, on and off for about 5 months now with Flash Builder. I haven't pin pointed what the cause is. At least in one case it had to do with my HTML wrapper. And the other case, was Flash Player Debugger plugin. At any rate, I replaced (or regenerated) my wrapper at one time to make it work. And the other time I reinstalled the plugin.
I hope that helps.
Looks like this was solved, but I wanted to throw out what I'd found, as I beat my head against a wall for hours for the last few days dealing with the same.
After initially playing around with the mm.cfg file (attempting to get trace/error logging to a file in ADDITION to in the FB debugger), I deleted it to bring the Flash player back to normal settings. I suspect something in the initial process caused trace() to stop working entirely.
Deleting and restarting all browsers, FB, etc. had no effect. Rebooting, however, did reset things.
Could just be coincidence, so this may not work, but:
for anyone who has this problem, try quitting everything, then deleting mm.cfg (from both likely locations), then reboot.
Well, removing the mm.cfg file did not help at all. I removed it and restarted FB4 and FF (Firefox) and FF created a new mm.cfg and I restarted FF again and did not get any trace statements. So then I tried what we do in the Java world when there are weird issues: clean compile. So after a clean compile, the trace statements started showing again.
That's good you found a solution. Doing a clean is a good idea in FlashBuilder/Eclipse when something isn't working correctly. I do cleans frequently when I compile a SWC via Ant on command-line. Because FlashBuilder doesn't seem to notice the updated SWC on the filesystem.
If you are skeptic about FlashBuilder's output files, you can flag the keep-generated-actionscript option to true, to see these generated files that will be used to compile the output file. Here is a link for command options:
You can set this option in the Additional compiler arguments field in FlashBuilder. You can find this if you do the following:
-Select your project in FlashBuilder and right-click on it to bring up the context menu. And in this menu select 'Properties'
-Then click on the 'Flex Compiler' item in the popup. The argument field should be on the right side on the popup at this point.