It's an ssh issue:
# ** [update_code] exception while rolling back: Net::SSH::HostKeyMismatch, fingerprint 7e:4c:e3:1a:f3:2a:08:5f:83:ed:ae:88:28:cf:e2:a2 does not match for babytoddler.org
# /usr/lib/ruby/gems/1.8/gems/net-ssh-1.1.1/lib/net/ssh/host-key-verifier.rb:47:in `process_cache_miss': fingerprint 7e:4c:e3:1a:f3:2a:08:5f:83:ed:ae:88:28:cf:e2:a2 does not match for mydomain.org (Net::SSH::HostKeyMismatch)
# from /usr/lib/ruby/gems/1.8/gems/net-ssh-1.1.1/lib/net/ssh/host-key-verifier.rb:38:in `verify'
I am having the problem as well. Sometimes deleting the given host
entry from .ssh/known_hosts fixes the problem, sometimes I have to
delete all the lines.