I rebooted the machine and tried it again under eclipse but still had the same problem. So I fired up processexplorer and closed the handle eclipse had on dx.jar (always fingers crossed!) and closed any running instances of adb just to be sure and it seemed to work then. As for the sdkmanager, I just manually copied it from the tools/lib to the root of the sdk folder. Although it has the same filesize as r8 so I guess it may not have even had any changes.. :-)
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