I have ~200 short text files (50kb) that all have a similar format. I want to find a line in each of those files that contains a certain string and then write that line plus
Have you tried using something other than 'Output.txt' to avoid any filesystem related issues as the problem?
What about an absolute path to avoid any funky unforeseen problems while diagnosing this.
This advice is simply from a diagnostic standpoint. Also check out the the OS X dtrace and dtruss.
See: Equivalent of strace -feopen < command > on mac os X