If you are having an nbsp problem - change your Preferences -> Clean Source to Pretty Print Tidy, and then re-open your file.
Its likely that the header of your document is invalid and not setting the type of the document to one that supports the nbsp entity. Your preferences may have been accidentally changed to 'Off' so Sigil reads the file as is, which generates the error message. With Pretty Print Tidy on, it corrects as much as it can and should allow your files to be opened.
And if you are seeing any odd entries in your files - try unzipping your original epub or looking at your original HTML file to see what is actually in the file, since it was probably pretty odd to begin with
