Error: Install failed with error: local variable 'h_settings' referenced before assignment

[hamdrew]

The Microsoft.GuestConfiguration.ConfigurationforLinux extension is suddenly failing to install on our Ubuntu 22.04 VMs.

The version being installed is 1.26.96 but this doesn't appear to be a documented release: Extension for Linux extension release notes

Error Log

The handler for VM extension type 'Microsoft.GuestConfiguration.ConfigurationforLinux' has reported terminal failure for VM extension 'AzurePolicyforLinux' with error message:  
[ExtensionOperationError] Non-zero exit code: 1,  
/var/lib/waagent/Microsoft.GuestConfiguration.ConfigurationforLinux-1.26.96/guest-configuration-shim gc_extension.py install  
  
[stdout]  
Linux distribution version is 22.04.  
Linux distribution is Ubuntu.  
Python 3.10.12 + python3 /var/lib/waagent/Microsoft.GuestConfiguration.ConfigurationforLinux-1.26.96/gc_extension.py install  
Importing utils failed with error: waagent2.0 doesn't support python3  
Unable to initialize waagent log because of exception name 'waagent' is not defined  
Info: ConfigurationforLinux started to handle.  
Error: Unable to load handler settings from /var/lib/waagent/Microsoft.GuestConfiguration.ConfigurationforLinux-1.26.96/config/0.settings  
Error: Install failed with error: local variable 'h_settings' referenced before assignment  
  
Stacktrace:  
Traceback (most recent call last):  
  File "/var/lib/waagent/Microsoft.GuestConfiguration.ConfigurationforLinux-1.26.96/gc_extension.py", line 134, in main  
    exit_code, output = operations[operation]()  
  File "/var/lib/waagent/Microsoft.GuestConfiguration.ConfigurationforLinux-1.26.96/gc_extension.py", line 175, in install  
    public_settings, protected_settings = get_settings()  
  File "/var/lib/waagent/Microsoft.GuestConfiguration.ConfigurationforLinux-1.26.96/gc_extension.py", line 321, in get_settings  
    if ('protectedSettings' in h_settings  
UnboundLocalError: local variable 'h_settings' referenced before assignment  
  
Error: Install failed with error: local variable 'h_settings' referenced before assignment  
  
Stacktrace:  
Traceback (most recent call last):  
  File "/var/lib/waagent/Microsoft.GuestConfiguration.ConfigurationforLinux-1.26.96/gc_extension.py", line 134, in main  
    exit_code, output = operations[operation]()  
  File "/var/lib/waagent/Microsoft.GuestConfiguration.ConfigurationforLinux-1.26.96/gc_extension.py", line 175, in install  
    public_settings, protected_settings = get_settings()  
  File "/var/lib/waagent/Microsoft.GuestConfiguration.ConfigurationforLinux-1.26.96/gc_extension.py", line 321, in get_settings  
    if ('protectedSettings' in h_settings  
UnboundLocalError: local variable 'h_settings' referenced before assignment  
  
[stderr]  
Running scope as unit: install_7aec8806-022f-4304-b9c4-5d92effade1a.scope  
  
Install handler failed for the extension.  
More information on troubleshooting is available at https://aka.ms/vmextensionlinuxtroubleshoot

[KiZach]

We see the same but now version is 1.26.97 and error is 'No such file or directory: /var/lib/waagent/Microsoft.GuestConfiguration,ConfigurationforLinux-1.26.97/GCAgent/GC' and validated directory GCAgent does not exists in installation directory.

[LeShaunJ]

Can confirm for both 1.26.96 & 1.26.97. While completely uninstalling then reinstalling "fixes" things, this is preventing us from updating our deployments via terraform/tofu.