How can I run `gcloud preview app setup-managed-vms` without this error?

When I run gcloud --verbosity debug preview app setup-managed-vms

I get the following error: I don't know how to fix google.appengine.tools.docker.containers.ImageError: Image with tag localhost:49153/google/appengine-java was not found

I have posted the entire detailed glassy table to pastebin .

I am running Google Cloud SDK 0.9.40 and docker 1.3.2.

I had another problem with 0.9.39, uninstall and reinstall everything, but v0.9.40 still doesn't do it.

How can I get past this?