hiera install/config problem

edit

After following http://puppetlabs.com/blog/first-look-installing-and-using-hiera/ my first attempt to use our existing hiera config generates the following error:

Error: Could not run: (/etc/puppet/hiera.yaml): found character that cannot start any token while scanning for the next token at line 8 column 7

But line 8 col 7 is completely innocuous. Also, this file works fine on all our other puppet masters. File is below, apologies that formatting obscures the text.

Suggestions?

---
:backends:
    - yaml

:logger: console

:hierarchy:

    - %{project}/%{server_env}/%{module_name}    ****** This is the offending line ****
    - %{project}/%{server_env}/common
    - %{project}/%{role_name}-role/%{module_name}
    - %{project}/%{module_name}
    - %{location}/%{module_name}
    - %{module_name ...