This is just a quick note to those who might run into this issue.

We upgraded to 1.7 SDK and it seems that this does not work with it. When trying to get the deployment information ("Get Deployment" in the logs) you will get following error:

The HTTP request was forbidden with client authentication scheme Anonymous

I took the source code and compiled it against 1.7 SDK and now it works. Unfortunately after that it doesn't work with 1.6 SDK anymore.

I'm running against the 1.6 SDK and am getting the same message you are showing with 1.7.  Did you have to do anything to get 1.6 deploy working?

I think DeployToAzure is not compatible with 1.6 either. I had a chat with a co-worker and he said he had to compile DeployToAzure against the azure sdk 1.6. So if you update the reference to the StorageClient assembly it should work after that. I wrote a blog post about it. I'm using 1.7 but I think the same method should work for 1.6

http://catchblock.com/blog/post/2012/08/20/DeployToAzure-with-Azure-SDK-v17.aspx