Editing distance clusters: a greedy string classification algorithm
wjholden.com
wjholden.com
One notable caveat is that there's no clear axis of classification. Sometimes things may be classified together because they talk about the same resource (with a long name). Sometimes things may be classified together because they have the same message template. Sometimes thing will be classified together because they share a lot of digits of time (not necessarily close in time).
Odds are you get some of each type of clustering.
holden
golden
golder
colder
corder
border
bonder
wonder
wander
warder
But I see that once you get longer strings then it works great. I like the log message processing.