Based on your description, it seems that RepeatMasker did not execute successfully, so any program that uses the output of RepeatMasker is not going to work properly. You are correct about the alignments though, they are not Clustal format. We would need to see your RepeatMasker command and we need some information about your data if you want help troubleshooting the issue.
I have not used REannotate, but I did my dissertation work on TE dynamics and I've published work comparing insertion times/ages. I could definitely help with the general subject but it is difficult to help with these specific programs without more information. One thing to keep in mind is that RepeatMasker can take a very, very long time to run on a genome, so you may think the program "hangs" but it could be still running.