Ian,
When hotsync fails, that is the app server telling MyEclipse that it cannot reload the changed class. This will likely fail if you rae changing the “shape” of your class (new methods, member vars, etc.).
However, I have had luck by just turning off warnings, and watching my app server console after I deploy a new file, and wait for it to see messages telling me that it is reloading the class. I only restart the server when class reloading fails (usually after a few hours and a few hundred changes).
So try and watch the JBoss console when you save changes to a file, see if you can see it reloading the new file anyway.