Ubuntu 12.04. yEd is installed in ~/software/yEd, which is in my PATH. I can be in any other directory (ie: ~/project/doc) and run "yEd diagram.graphml". yEd opens, and gives me an error saying ~/software/yEd/diagram.graphml isn't found.
yEd is using the location of the executable as the base directory for relative paths instead of the current working directory.