JDK 1.4.1
What’s happening is that Java 1.4.1, now the default when you type java on the command line, does not support certain Java-to-Carbon technologies that QuickTime for Java depends on.
This change also breaks DropDMG 2.0’s MacBinary encoder. JDK 1.3.1 is still installed and available in /System/Library/Frameworks/JavaVM.framework/Versions/1.3.1/, however I made the mistake of hard-coding /usr/bin/java into DropDMG. (In the future I will indirect such paths through the defaults database.)
The next version of DropDMG will use a new MacBinary encoder that works with JDK 1.4.1. For now, if you want to make MacBinary-encoded images with DropDMG, you can not update to JDK 1.4.1 or symlink /usr/bin/java to /System/Library/Frameworks/JavaVM.framework/Versions/1.3.1/Commands/java.
sudo mv /usr/bin/java /usr/bin/java141
sudo ln -s /System/Library/Frameworks/JavaVM.framework/Versions/1.3.1/Commands/java /usr/bin/java