I think vanhees is right about the incompatibility of the collapse with relativity. However, it's not because of locality, but rather because of the incompatibility with the Poincare group. There is an interplay between time evolution, translations, rotations and boosts, which is encoded in the Poincare group relations and its Lie algebra. In quantum theory, compatibility with relativity is guaranteed by the use of unitary representations of the (centrally extended universal cover of the) Poincare group. If you claim that collapse is compatible with relativity, you must explain in what sense it is supposed to satisfy the Poincare group relations (representation theory won't work, since it is a non-linear operation) and then show that it actually satisfies them. I don't think anyone has done this and I don't see how it is supposed to work. For example, in the Poincare group, two time evolutions always commute, but projectors of non-commuting observables don't commute in general. How do you resolve this issue? Another example: There is a Poincare group element corresponding to a time translation followed by a Lorentz boost. What is the Poincare group element corresponding to a collapse followed by a boost?