If you’re running into problems launching the Android SDK from w/in Xamarin Studio (or other Java-based tools) on Mac Yosemite, the issue is likely that you need to update your Java environment BUT…
… the solution is not the update that’s suggested in the error message.
Instead use this link from Apple.
That should get you all fixed up.
I came across this solution on a few forums, including this Xamarin Forum … I want to be sure and give credit to the hard work of the folks who worked this one out!
Jim Wilson (a.k.a. hedgehogjim) 