Apparently it does not like some of the assembler directives which have been changed or removed in versions beyond 4.0. Specifically
Unfortunately I have no experience at all with ARM Assembler language. Has anyone got a "fixed" version?
The IAR assembler. For example, the org directive in no longer implemented
The answer, as suggested by IAR is to go back to using 4.41. Hooray. Or pay someone to do the port from EWARM 4.41 to 7.8
That was well worth the £1500 a year support we pay them.