The error I get is not helpful and doesn’t tell what’s wrong… and the complete build worked fine on 0.41 (both hugo and hugo server) … I’ll keep digging. But it will be great if you try out recreating the above steps and may be end up finding a fix.
Update: The issue is only with hugo server. Running hugo works on v0.42. I even deployed a new post using v0.43-DEV on my blog, and that worked fine. But during development, hugo server has now stopped publishing the “posts” section.