What OS and version of MzScheme are you on? I have had errors with line feeds before when pasting code from the clipboard on Windows, but those errors don't look the same as the ones you have encountered.
arc> '(1
2
3)
(1 2 3)
The above, typed from directly into the terminal, works fine, but the below, pasted from Notepad, results in the mysterious insertion of the symbol 'M into the list.
arc> '(1
2
3)
(1 2 M)
I posted a bug report at http://bugs.plt-scheme.org/query/?cmd=view&pr=9210, but they don't seem to have done anything about it in the last couple of months :( (although I suppose it is possible this bug doesn't occur in version 400).
My problems also occurred when copying and pasting, but not when (load) the file I was copying from. Another common error in this situation was undefined __M.
I just tried v4.0.1 to see if they had fixed the bug... and it seems to still be there. I guess you just have to be careful about what you paste into the REPL under Windows. (Or use arc-mode in Emacs ;-)
