Azure Storage Emulator Error Accessing Blobs

Just noticed a strange issue. I can no longer access the blobs (iamge files) that are stored in my Azure Storage Emulator. First noticed that my web role wasn't serving up my files from emulator when running in debug. I tried to access files using a third party app, cloudberry. cloudberry lets me browse the storage emulator container that I created, but when I try to access a file it fails. Both my app and cloudberry fail with 500 error returned... not helpful.

Tried restarting storage emulator, no luck. Tried starting emulator from Azure SDK command prompt to see if there was an error. started successfully... no error reported, but still having my issue when i try and access my blobs. I have SQL Express installed and I verified that MSSQL$SQLEXPRESS service is running. I have made no recent changes to my web role configurations. I am using Azure Tools version: June 2012. Anyone have ideas on what else I should try?

Thanks!

This issue is also discussed in this SO thread:

Mysterious disappearing Azure development storage assets

In my experience, I've got this problem only the emulators that ships with Azure SDK 1.7 . As you can see from my answer, the problem disappears by using the updated emulator in Azure SDK 1.8 (I've used it for more than 4 months) -- you can upgrade it while continuing to use 1.7 libraries in your cloud projects.