We upgraded the Azure SDK from version 1.8 to 2.1 a few months back on a client and our deployments started failing. The Instances tab in Azure Management Portal looked like the following:
We couldn't figure it out for quite some time. When we viewed the properties of each Nuget package reference for the various projects (see below), all appropriate package references were set to version 2.1. Nothing was version 1.8. It was only when we started digging into the individual app configs that we still found some references to version 1.8. My intuition is that those are supposed to get automatically updated, but somehow never did.
The solution was to manually go through each app config and update the reference to version 2.1. Tedious, but not terribly difficult.