I have the Same problem. It occurs if I make some innocent modifications in my code, for example if I replace some text like...
prog_char PROGMEM Cmd_073[]="HTTPServerPort";
..in..
prog_char PROGMEM Cmd_073[]="PortInput";
The following error occures:
c:/program files (x86)/arduino-1.0.1/hardware/tools/avr/bin/../lib/gcc/avr/4.3.2/../../../../avr/lib/avr6/crtm2560.o: In function __vector_default': (.vectors+0x7c): relocation truncated to fit: R_AVR_13_PCREL against symbol __vector_31' defined in .text section in c:/program files (x86)/arduino-1.0.1/hardware/tools/avr/bin/../lib/gcc/avr/4.3.2/../../../../avr/lib/avr6/crtm2560.o
My code is only 77Kbyte.
Arduino version=1.0.1, Windows-7, Board=ATMega2560