"Xml document ...temp\<filename>.tmp contains invalid characters" error when generating ALTER script (4234963)

While running the Sync and Convert Wizard (comparing 2 reverse engineered SQLServer models to generate ALTER scripts), the following errors were given by Toad. 

a) "Xml document c:\users\<personal folder>\appdata\local\temp\5D16.tmp contains invalid characters and cannot be opened. Replacing invalid characters with spaces allows you to open the damaged file.

Replace invalid characters?"

Clicked "yes" through that message.

b) Then given an access violation error message referring to TDM.exe.

At that point, the application looks like it is still working, but nothing is happening. Toad is closed by using task manager to kill the process.

Exit Toad and rename the C:\Users\<personal folder>\AppData\Roaming\Quest Software\Toad Data Modeler