Actually I think this is perfectly legal for statements, according to C there is something called an "empty statement". and having a bunch of semicolons together just means to have a bunch of empty statements :smileyhappy:.
When I remember right, additional semicolons are not legal for declarations, there it is a common extension many compiler support, anyway. The double semicolon is not the problem.
What I would do is to preprocess the complete source file,
save it as *.c file, add it to the project and check if compiling that does still cause the issue. Then depending on the result, try to simplify the test file or to see what happens during preprocessing.
Also the 5.7 is the version of the ide, which does not matter much. What is the version of the product?
Something like "CW for HC(S)08 V5.1" for example.
Daniel