<p>How can I generate UML diagrams (especially sequence diagrams) from existing Java code?</p>

What is your codebase? Java or C++?
eUML2 for Java is a powerful UML modeler designed for Java developper
  in Eclipse. The free edition can be used for commercial use. It
  supports the following features:
CVS and Team Support
Designed for large project with multiple and customizable model views
Helios Compliant
Real-time code/model synchronization
UML2.1 compliant and support of OMG XMI
JDK 1.4 and 1.5 support
The commercial edition provides:
Advanced reversed engineering
Powerful true dependency analyze tools
UML Profile and MDD
Database tools
Customizable template support