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If anyone else faces this problem here is how we fixed it:
first i set the compile to disable: php -f shel/compiler.php – disable next set the config_cache_options to 0 all columns
We figure something went crazy with the compiler, which apparently isn’t really required any more for Magento 1.6 or 1.7 and above.
When we cleared the cache everything just went crazy, even on new droplets.