I went through the code trying to figure out what could cause the issue. I found one major problem: the manual detection of the SDK doesn't work. At all. So until I fix that, we need to rely on the auto-detection of the SDK. But your problem doesn't seem to stem from that anyway, since the SDK path seems to be picked up correctly.
One thing I read on the web was that it might be an encoding issue. When you open the modeldef.xml file with notepad, does it state UTF-8 on the bottom right? Also, is the header of the modeldef file correct? It should be:
<?xml version="1.0" encoding="utf-8" ?>