Error:Process terminated without establishing connection to debugger. initial content not found

I managed to find a solution to the problem. It has to do with outdated app xml config files.
So after importing project from source control, create a new application (eg. TestApp) and run / debug it, which works fine.

Compare the 2 app xml config files. In the new file at the top you will see a line:
application xmlns="http://ns.adobe.com/air/application/1.5"
In the old file I had:
application xmlns="http://ns.adobe.com/air/application/1"

So you can change the old with the new app configuration.