Tishadow not working with "Alloy app directory does not exist..." error

[icecandy]

I'm using the latest version 2.10.1. Things were working more or less fine then suddenly I am getting the following error when making a change in a file once the project is running ie it compiles fine the first time with:

$appc ti build -p ios --target simulator --device-id D3223AA3-704A-4BBD-AD6C-8933B9C617E2 --log-level trace --sim-focus --shadow --host 192.168.0.24

[ERROR] Alloy "app" directory does not exist at "/app"
[ERROR] Alloy Compile Error

I am omitting the actual path here, but the file structure is:

/Project

where Project is the Titanium Alloy project folder (which obviously contains a folder called "app", but there is no folder called "app" a level up).

This does not happen during a normal compile so it must be a tishadow issue.