Hello,
"Model has a face with overlapping vertices."
This means that you have a triangle somewhere in the model where 2 of the 3 points are exactly the same. This is an error for 2 reasons: 1) the game has to calculate this triangle even though you will never be able to see it. 2) the triangle will cause math errors with face normals and vertex normals in mdlops.
Download mdlops from my site:
http://cchargin.home.comcast.net/kotor/)
Even though you already have mdlops 0.2, download it again. I put in some code that will tell you which triangle is messing you up. When you run mdlops you will notice that along with the mdlops window, there is also a command line window.
-use mdlops to try to convert your ascii mdl to binary.
-when you get the error open the command line window and it will tell you the coordinates of the problem triangle.
-Now, open up the ascii mdl and look for the coordinates shown in the command line window. change one of the 2 identical coordinates a little.
Once you change the coordinate you can then compile the model, or load it back into your modeller and look for the triangle you changed, and fix it.