I will try that. I'm kind of waiting for the next approach to before I do that. Here is what I noticed.
o The version of web2py on the server which works is not the same as the version on the second server.
o If I packaged the app on the server that works and then transfer it to the new one using the admin ide webpage, the package created by packall is only 16MB. If I tar up the entire web2py directory which includes the applicaitons/thecustom app folder, I get a whopping 3GB tar file. I'm currently uploading that 3GB file to the new server so I can run the whole framework and app. I'm thinking that this duplicates the web2py framework and in case there is something there which is not in the pack all operation, this will get it.
o regarding the .pyc files, i did do a clean operation in the ide. I assumed that would clear out the compile python files. perhaps not.