I tested the problem with the latest version of RadEditor for MOSS 5.8.4 and I was not able to reproduce it. For your convenience I created a small video with my test http://screencast.com/t/x7NNAMis9
Inform me if I am doing anything wrong in my test and provide me with the web.config file of your MOSS site and the ToolsFile.xml, ListToolsFile.xml, ConfigFile.xml, ListConfigFile.xml, which are located in the /Program Files/Common Files/Microsoft Shared/web server extensions/wpresources/RadEditorSharePoint/188.8.131.52__1f131a624888eeed/Resources/ folder.
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