I tracked this down but it may be indicative of a larger problem.
I had some kind of CVS glitch and I ended up with files with the pattern of ".#EspecialHandling.java".
Something added ".#" in front of a number of files in my project.
The problems were:
1) If I tried deleting these files through IntelliJ safe delete complained that these files were in use, they were not, the original .java files were.
2) If I tried to run a compile then I would get a compiler error indicating the parent folder as an invalid flag.
The solution was remove the files through Windows explorer but it took a while to track this down as I had not explicitely created these files.