Possibly a number of reasons but I notice that you are using .prj files and V8 will be expecting .xprj files.
Could this be the problem?
If you have any processes using .mod files you could have the same problem.
I presume you have considered the conversion utility and done whatever is necessary there but perhaps not for you programs and scripts?
I could be wrong of course! Programming and automation are not strong points in my knowledge.
OK. Basic questions to make sure we are covering the simple issues.
Do the .xprj files the code now refers to actually exist?
Have you run the V8 Utility program to convert prj and mod files to xprj and xmod?
Alternatively have you opened the models/projects that were originally text files and saved them using V8 (which will convert them to XML files anyway).
If the answers to that are all positive I suppose the next steps would be to double check the permissions for the folders referenced, the Monarch files referenced and the registry entries created as part of the installation.
Also whether there are any new developments that might affect the way the code works so it might be worth checking the latest programmers guide from the Datawatch web site.
It may also be worth considering using the Hidden settings (see "Settings" in the help file) to see of logging the operations provides any information but it may not be of much use to you here.
If none of these suggestions get you anywhere I am sure one of the automation power users will come up with the answer!