After updating from 7.0.6 to 7.0.7 and trying to "Recompile Language(s)" in the Modules section, I get the following error next to every language excepting the default English language:
"An error occured. Contact with module's vendor"
This happens even if you create a new language file from the dafault English language file (without editing any keys).
After trying to recompile the new language file and exporting it, it is about half the size it was before trying to recompile it. So it seems like the script is also deleting many of the language keys instead of recompiling them.