Random question: Exactly what do you mean with "modifier"?

Did you select the mesh in object mode, then the bones, and use Ctrl+P>Armature>Parent to object, or whatever one was supposed to? (As I currently have Blender closed, I can't check to make sure this is correct.)

Well, as I have no idea of what the problem is (note that I don't know what envelopes and such are), my best idea would be that you'd remove all armature/mesh deformers and all that stuff, and then re-do the weightmapping and such, making sure the bones are all normal bones, and the mesh is "solid" and not "deformable" in any way other than by the standard normal bones. Can't help more than that at all.

Try searching for instructions on the Blender SMD Tools, as the Blender Source Tools were previously called that.

Actually, eyes are not directly part of the .smd/.dmx mesh (as far as I know), due to the shader (for the material, after compiling) overwriting the UV coordinates. One just has to include a unique material for each eye, and define them in the .qc, and then the rest will be handled by the Source Engine.
Though, exactly what is your problem?

It might also be possible to put the .zip somewhere outside of a user folder's subfolders. (Like a portable harddrive or something.) Like "[Drive letter]:/Blender Addons/", and then picking that via Blender's addons tab.

Hm. I have no idea what could cause that. [Note that I am [b]not[/b] the author of the Blender Source Tools, though.] I use Blender 2.69, with version 1.10.2 of the Source Tools, and it works just fine for me. Are you sure you do not rename the .zip, and that you do NOT extract it, and then select it via "Install addon from file"?

Thank you.

Alright, so, no idea what to type here or anything, since the guideline has been removed.

Anyways, for example, if I import the Hard-Ware Morphed Scout from the Source SDK, make sure only the head will export, and as DMX, then if I make sure to set the Flex Type to Advanced, set the Hard-Ware Morphed Scout from the Source SDK as flex controller definitions, and export the head, it will say "1 file exported in 5.2 seconds with 0 errors and 1 warnings: WARNING: No flex controller defined for shape PuffLips" (no warning should had been there), then if I compile that, there will be no flexes. If I try to export again, Blender might crash/quit, and if it doesn't, it again just exports the .dmx with no flexes, with the same warning.

No idea for the "Simple Flex" Type, though.

Seeing I am trying to do something related to the Hard-Ware Morphed Scout, this bug is keeping me from it for now.

Running Blender 2.69, on a 64-bit Windows 7, with version 1.10.1 of the Blender Source Tools. Engine Path is set to the path of the FilmMaker's StudioMDL.

~Zwip-Zwap Zapony