It's ascii #003, also known as ETX (end of text). For some reason when opening files containing this character it will show up fine but editing is a pain. Basically what happens is that it seems the character has a width that is different from how Textpad interprets it because I can click right after one letter but if I hit backspace it deletes a different one. This is what happens:
If I hit backspace where the cursor is, it would delete the "Z" character instead of what would appear to be blank spaces. It seems to get worse the more of that character there is. I had used an old version of Textpad before with these files and didn't have this problem but I can't remember what version number that was and whether it was some setting in the syntax files that fixed it. It's also worth noting that this problem doesn't happen in notepad, which I've been forced to use in the meantime.
For all characters, including control characters, TextPad asks the operating system the width each character, but for certain control characters it appears to be coming back with the wrong answer. We will need to find out why this is happening.
In the mean time, you can work around the problem by using the Terminal font. This font has problems with scaling and won't correctly display ANSI characters from 128 upwards.
Alternatively, if you have any Adobe fonts installed, these all seem to work properly.
Thanks for the tip. It might be totally unrelated but I recently reinstalled Windows and this time around I installed the Asian language pack which turned the character from a block into the character you see there. Maybe that has something to do with it?
