Rails 3.1.0.rc1 assets not compiling

I started a test app to try out 3.1

At first .coffee files were compiling into application.js, but now
nothing is compiled.

I set up 2 .coffee files with alerts and expected //=require_tree to
incorporate them into application.js, but that does not happen.
ran rake assets:precompile and indeed the file in public/assets
matches what I see in the browser.

Here is a list of my gems

and here is my sample app

I also tried requiring specific files like
//= require foo
and that had no effect.

interestingly if I also required a file that does not exist like
//= require bar

I see no console errors during compilation

Any ideas what could be the cause?

found the problem.

There can't be any blank lines in the manifest


Is this a bug or should the text in the generated file be more explicit?