I know this is an old post, but I wanted to contribute in case someone else comes across this problem. When I experienced this problem (today) the build path looked good, class path looked good, default output directory was good, Java compiler looked good, but nothing.
Then I selected Project, Properties, Builders and it said the builder was missing...the builder was incorrect. I removed the missing builder, opened the .project file (you may have to adjust the navigation filters to see this) and added:
<buildCommand>
<name>org.eclipse.jdt.core.javabuilder</name>
<arguments>
</arguments>
</buildCommand>
inside the buildSet tags, and viola everything works. Hope this helps someone.