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I had a very similar problem with a project with lots of code and library items when I started using CS5. The thing that worked for me was setting the java (JVM) heap size to a bigger value, since in CS5 the default is a lot less than in previous versions. Interesting enough though after much searching I found there are 3 ways of doing this, and only one of them worked for me. You can either edit some values in the Windows registry, set an enviromntal variable in Windows at the system level, or edit a config file named something like "jvm.ini" which was the only one that worked for me.
Sorry for not providing you any additional information, I don't remember the details but I hope this was at least somewhat helplful to get you in the right direction.
I modified the jvm.ini and increased the value from -Xmx128m to -Xmx256m. This solved the problem. Sigh, wouldn't it be nice if flash gave a error to indicate the compile was not successful and an explaination! The werid thing through is that when I published the SWF, the objects were displayed within the movieclip's timeline - but yet I am not able to access the items via linkage name!
While this problem is solved for now, I may come across this again as more items gets added to the library.
So, having 3.25GB of RAM, I tried using -Xmx512m and -Xmx1024m but Flash CS5 throws this error: Error initializing Java Runtime Environment when I launch the application. So, I would like to know why I can't use 512 or 1024.. I even tried restarting my machine.
Thanks very much for your help!