Before upgrading to 1.8 (Oct 2012) this is how we configured our sites in the ServiceDefinition.
<Site name="Admin" physicalDirectory="..\Company.Admin">
<Bindings>
<Binding name="AdminBindingHttp" endpointName="HttpEndpoint" hostHeader="admin.company.com" />
</Bindings>
</Site>
After we upgraded I was getting the following error when trying to publish.
Error 125 Cannot find the physical directory 'C:\Users\Me\Code\Company.Cloud\bin\Company.Admin' for virtual path Admin/.
We had to update the physicalDirectory value and move up 2 more folders.
<Site name="Admin" physicalDirectory="..\..\..\Company.Admin">
<Bindings>
<Binding name="AdminBindingHttp" endpointName="HttpEndpoint" hostHeader="admin.company.com" />
</Bindings>
</Site>
It seems that previous to 1.8 Azure was executing in context of the original location of the csdef file but now it's executing from the bin\Release\ServiceDefinition.csdef which is 2 folders deeper.
I've been unsuccessful at finding a tutorial online that specifically talks about this feature used with the latest SDK version. Was this an official change? I should also mention that we also upgraded to VS 2012 at the same time.
I feel like this feature is constantly neglected. (See lack of .config transforms issue). We would love to switch to Azure WebSites but we're unable to do so until SSL/HTTPS is available and it is out of preview.