Capistrano 2.4.0 was released last week, unfortunately it breaks a couple of things in the EC2 on Rails 0.9.8.1 Capistrano tasks. It will be fixed in the next release.
A temporary workaround is to use Capistrano 2.3.0:
sudo gem uninstall capistrano -v 2.4.0
sudo gem install capistrano -v 2.3.0
To check which version you're currently using:
gem list capistrano
Thanks to those who reported this!
Paul