I don’t remember a lot about MEW 8 and how it handled projects, so this may be entirely useless, but I’ll take a shot.
As I recall, previous versions of MEW used .PRJ as the extension for project files, instead of .MEP. Do you have any PRJ files floating around at the top of the web site working directory on your system?
You might also want to open <MEW>\Src\Project.s and see where that exact error message comes from; with a little luck, it will only be in one place, so you can see what’s causing the problem with reading it.
I’m assuming that you can’t create a new project without opening the project manager (In MEW 9, I don’t think the ‘project manager’ exists as such any longer…).
You might want to try View|System and look in the tree under Global, Strings, and track down PRJCURNAME. When you click on it, the project filename will be displayed up at the top of the navigation pane.
I know this isn’t exactly an answer to your question, but hopefully it will give you a place to start.