I was never able to successfully use the sbt based builder until I realized that the .classpath files generated by sbt-eclipse might be slightly off.
After some experimentation, I found the core issue:
If you have multiple <classpathentry kind="lib" ...> before <classpathentry kind="con" path="org.scala-ide.sdt.launching.SCALA_CONTAINER" />, the builder won't be able to find scala-library. Reconfiguring the buildpath so that SCALA_CONTAINER follows immediately after the source entries fixed the issue. I didn't experiment much further.
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