I'm not sure if this is the proper solution, but if anyone else ever has the same problem, this is my workaround:
After a bit of troubleshooting I decided that the model editor would only ever crashed if I imported the custom mesh into an existing entity. Since I wanted to use the existing door body (out of lazyness and also to avoid any colliding issues) I simply:
1. opened the original "prison.ent" and saved it as "prison_custom.ent"
2. opened the ent file with notepad, and changed the "prison.dae" to my custom "prison_custom.dae"
3. and it loads! with no crashing in both level editor and model editor.
Thanks for the help nkmol, i didn't even have to redownload the editor