GAE/Google AppEngine problem with web2py: "Deployment successful" but GAE does not launch

[Tom Campbell]

My AppEngine ID is memberable0.
I copied examples/app.example.yaml to web2py root as app.yaml
Only change I made was:
application: memberable0
Web2py lives in /Users/tom/Dropbox/work/m/web2py and that path shows successfully in GoogleAppEngineLauncher, which shows port 8081 for the web server (not running web2py's Rocket server).

Nothing happens. GoogleAppEngineLauncher just sits there with the yellow wait icon in the leftmost column.
The Log Console for memberable0 shows literally nothing.

In Chrome the Network tab in the dev tools shows nothing was ever loaded.

If I run this from the shell:
$ appcfg.py update .

I get tons of output, with thousand of lines that look like this:

# Tons of the following:
Could not guess mimetype for applications/lte/static/css/fontawesome/src/3.2.1/assets/less/bootstrap-2.3.2/responsive.less. Using application/octet-stream.

# Finally ending with:
03:25 PM Cloning 8105 static files.
03:25 PM Cloned 2000 files.
03:25 PM Cloned 4000 files.
03:25 PM Cloned 6000 files.
03:25 PM Cloned 8000 files.
03:25 PM Cloning 1097 application files.
03:25 PM Compilation starting.
03:25 PM Compilation completed.
03:25 PM Starting deployment.
03:25 PM Checking if deployment succeeded.
03:25 PM Deployment successful.
03:25 PM Checking if updated app version is serving.
03:25 PM Completed update of app: memberable0, version: 1

Nonetheless, when I click Run, GoogleAppEngineLauncher is still inert. Out of desperation I have tried other ports like 12080 but to no avail.

Can anyone tell me what I'm doing wrong or if there's some other diagnostic tool I'm missing?

Version 2.9.12-stable+timestamp.2015.01.17.06.11.03
Running on a high end Mac, OS X Yosemite 10.10.4