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Can you tell me the correct version of your oracle designer repository database and can you give me the exact version of your Developer Suite.
Oracle Developer Suite 10.1.2.0.2
Oracle Designer 10.1.2.6
Oracle Database 10.2.0.5
There are some known issues when using for instance the Oracle Application Design transformer which also freeze the application. I know thats not the Entity relationship diagrammer but it could be related to the same problem.
In what version of the Oracle Database the Designer Repository is installed?
If it higher then 10.2.0.3 then you could set the following settings:
alter system set "_optimizer_cost_based_transformation"=off scope=both;
alter system set "_optimizer_ignore_hints"= true scope=both;
You could try and make a logon trigger for you user to see if the statement have effect:
create or replace trigger <repository_user>.on_logon
after logon on database
execute immediate 'alter session set "_optimizer_cost_based_transformation"=off';
execute immediate 'alter session set "_optimizer_ignore_hints"= true';