Either omega isn't active or the omega cache is empty

I created three layouts each consisting of a layout.inc file and and layout.tpl.php file, each inside it's own folder, which are inside the layout folder in my omega subtheme. I put layout.scss files each in their own folder, inside the layouts folder in the sass folder of the subtheme. Ruby created the appropriate css files in the css folder in the subtheme.

So far so good.

Under the subtheme settings in the UI their is a place to turn on the Layouts Extention, which I have done. However I am only able to choose one layout not multiple layouts. (I assumed you should check each of the layout you want to have active in the subtheme... but maybe I am only allowed to choose one because that is suppose to be the default???)

Under contexts, I add the context choose Context_Omega for the response however there is no menu to choose a layout instead there is a message "Either omega isn't active or the omega cache is empty."

It looks like that text is generated by Context_Omega after it checks the settings for Layout Extension...

Do you know if I am missing a step? Any ideas about how to troubleshoot this issue?