Restore question

I've recently had to restore a couple of db's from backup and there were
obsolete employee tables in the dbs.

Now I can't drop or rename this or any other tables to properly load new
ones.

sqltest=# drop table employee
sqltest-#

I used pg_dump on the two dbs, and restored with the following:
psql -f /home/steve/080502sltestdb.out sqltest

Psql is also broken for the next command after one of these failed drops
(when it's showing the - instead of =):

sqltest-# select * from employee;
ERROR: parser: parse error at or near "select"

try again and:

sqltest=# select * from employee;
id | employee_id | name | addr1 | addr2 | addr3 | workphone |
homephone | grade | title_position | salary | salarytype |
exemptcode | gov_id | email | startdate | enddate | notes

Does anyone recognize what's broken here or know what I might be able to
do to fix it?

Thanks for any assistance.
Steve