I tried importing into 2.49b, but nothing happened. Import failed, I'm assuming, just like yours. I think it has something to do with animations
Try other old versions of Blender. There's a known issue with exporting/importing COLLADA data in the newer Blender versions, specifically when you try and import Amnesia models or use said exports with HPL tools. The wiki says anything past 2.5 won't work, but for my purposes, using 2.57 along with 2.49b lets me properly export models. But so far the ones I've done have no animations. Looks like you may need to hunt down a different modelling program if Blender is a dead end. Sorry mate