I encountered the same problem and this is how I fixed it: go into your Live preferences, then to the 'Library' section of the preferences. Select M4L (I don't recall the exact name and I'm not at my computer), then click 'Repair Library'.
Nice, thanks bdc.
I have repaired the lib and now it works fine.
The [wetdry] has been replaced by [pluggo.dryWet3~] and the [damp] by [nebula.spf].
I don't know where was the problem. Probably I have not seen the update for M4L ...?