I am having this issue. I have 3.2.1.
I my javascript console, I see this error message:
Object [object Object] has no method 'wpdialog'
I have upgraded WordPress a number of times. Unfortunately, I don’t have my original version number, but my original install was 1/26/2011. I just did a fresh install, and I don’t have this problem.
I installed the same plugins in my fresh install that I have in my other one, and the link button still works. I copied the wp-includes from my fresh install to my old install, and that didn’t fix the old install. So, I am still looking…
The buttons on the TinyMCE Editor look slightly different. I am wondering if I can update the TinyMCE editor for that.