EDIT: I found out that if I had the folder "shadec" in a subdirectory it would give me that error; I had to put "shadec" in my project directory. I even tried defining all the subfolders but it still gave me that error.
EDIT2: I seem to be getting a lot of errors when I open a level in WED. For example:
Invalid name: sc_lights_shadowmapLocal.fx
Invalid name: sc_lights_shadowmapBlur.fx
...
Invalid name: sc_pp_explosionRefractScreen.fx
Any idea how to get rid of these? It would seem the names are too long perhaps?