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Locate the External Tools drop down button, and open up the External Tools dialog. Create a new launch configuration (doesn't matter which type), and open up the Common tab. In the Display in Favourites Menu section, select the External Tools option. Without hitting apply, rename your launch configuration. Now, save and exit the page. Click on your external tools drop down menu again, and your launch configuration will not be on the menu (and it should be). Select the Organize Favourites option, and on the ensuing dialog, your launch configuration is not listed. I ran into this problem while implementing a patch for Bug 80447.
*** This bug has been marked as a duplicate of 74002 ***