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I was able to get the AppleScript working on Mountain Lion. Replace the lines:

Code:
--get current items in todo.txt
open for access todoTxtPath
set todoData to paragraphs of (read POSIX file todoTxtPath)
close access todoTxtPath
with

Code:
--get current items in todo.txt
set todoData to paragraphs of (do shell script "grep . " & todoTxtPath)