I installed the latest version of the Flex SDK which is 3.5. I can compile now but need to clean up my paths to my AS3 repositories. Those no longer work so I'm close.
Glad to hear you can compile again!
When I type echo $PATH in Terminal I get the following: /usr/bin:/bin:/usr/sbin:/sbin:/usr/local/bin:/usr/X11/bin
Ok, there's nothing there that I'd worry about.
Cheers, Simon