I'm saw the exact same issue. It just so happens that I also have a MAC running the same LION OS and Java version. I'm running USCPE in a VMFusion VM. I was able to log in with no problems for a week or so. Then all of a sudden I started seeing the Java error when logging in. I tried a few different things, to no avail, but was able to resolve this by shutting down and restarting the VM. Just wanted to document this in case anyone else runs into this issue. Hopefully you will have already restarted the VM as part of your troubleshooting before performing a Google search as I did.