I use com.android.tools.build:gradle:2.0.0-alpha3 and gradle 2.8 before I update to Android Studio 2.0 preview 5. It works fine.
After I update to 2.0 preview 5,it t
Your problem is with instant run, because if project builds and APK installs, it can't be Gradle issue.
Instant Run is still under development and has this issue of not working properly.
To disable the instant run: