OK, here is modifier version from activeCollab 2.1 until we look into the problems with the latest version. Main problem is that we were not able to reproduce the problems you are reporting - it works as expected in our tests.
Problem with old version of the modifier is that it did not recognize links at the beginning of the line. We tried to fix that, but instead made the system take more data from the text than it should. Currently we are working on completing what we started and have a reliable converter that behaves as expected. Until it's ready, use the old one (in comment #8).
Edited: Unpack the archive and upload each file to its respective location at your activeCollab setup.
Please let us know if you find any places that still break the URLs or if any problems arise after applying this patch.