Mac OS X Lion v10.7.2 Xcode v4.2.1 Build 4D502 gcc version 4.2.1 (Based on Apple Inc. build 5658) (LLVM build 2336.1.00) GNU gdb 6.3.50-20050815 (Apple version gdb-1708) (Th
Manually removing the build folder may help. Clean does not always do this properly, for reasons unknown. The build folder used to be in the project directory, but now (also) exists in ~/Library/Developer/Xcode/DerivedData/
Solved by original poster:
Oh wait I had a brainstorm because of your suggestion above, and from Terminal I used: find . -name 'myimage.png' 2> /dev/null and I found the secret hidden cache! It is in my user library here: ~/Library/Application Support/iPhone Simulator/4.3.2/Applications/ Just delete everything in the Applications directory. May also need to do this one as well: ~/Library/Application Support/iPhone Simulator/5.0/Applications/