I upgraded to OS X Yosemite to see if the problem resolved, it did not. I'm currently on OS X 10.10.1
I tried various things, including the python script mentioned on apple forums https://discussions.apple.com/thread/5470393?start=15&tstart=0
, but focus never left UltraEdit.
I went back to a previous version of UltraEdit and there were no issues. I returned to 220.127.116.11 and experimented, found that by removing "Show auto-complete dialog automatically" I was able to solve the issue on my copy. Go to UltraEdit -> Editor, Auto-Complete, then clear the Auto-Complete. This seems to have resolved the issue, so this is actually a bug or compatibility issue with 18.104.22.168. I'll post back if the behavior returns.