The only thing I can think is that the file itself is saved with UTF-16 encoding, and the CF compiler is baulking at that. That said, I emulated this on my PC and my CF install (same as Duncan's, we work in the same office) dealt with it just fine.
If the file is saved in any sort of non-ANSI encoding, you will need a <cfprocessingdirective> at the top of the file to tell the CF compiler how to read the file.
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Adam