I got the answer to this from someone on Stack Overflow.... re-posting it 
here in case it helps someone.

Basically, in permissions, my account was missing the App Engine service 
account *[email protected]*
This happened to someone else too.
More details here:

http://stackoverflow.com/questions/33902417/google-managed-vm-error-app-engine-service-account-has-insufficient-permissions/33923292#33923292


On Wednesday, November 25, 2015 at 3:42:16 PM UTC-5, Robert Dyas wrote:
>
> When I try to deploy a Managed VM I get this error:
>
> App Engine service account has insufficient permissions for project
>
> Any suggestions on what to look at to fix this? 
>
>

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