I've had this too. I had a project open and I closed Flex. The network path to the project changed, and when I reopened Flex the next time round, this is the error I got!
The .log file told me nothing - just lots of stuff that makes no sense.
So I renamed my Flash Builder 4 folder inside my profile. I'm on Windows 7, so for me this was located under C:\Users\<username>\ called "Flash Builder 4". This contained all the project information, including the .log file, but the projects themselves are hosted remotely.
By renaming this folder to something else and restarting Flex, it worked, but I had no projects listed and all my custom settings were gone. All I had to do was re-import all the projects from the new network path and I was ready to go.
Thanks, RandomReado -
This saved the day. For anyone on a Mac, delete /users/[user]/Documents/Adobe Flash Builder 4/.metadata folder. There may be a more specific subdirectory in which to clear and I haven't had a chance to see if it has also eliminated any prefs I modified earlier but getting up and running was much more important to me than any other inconvenience (hint: duplicate a copy of your .metadata folder before deleting it).