OK, the issue here is that Buildkit is disabled. Which version of Docker do you have installed locally?
Try this:
DOCKER_BUILDKIT=1 fly deploy --remote-only
I just pushed a change that should make the remote deployment work without enabling Buildkit. So your previous attempt should work.
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I noticed you wrote in about a limit be applied to your community account. Unfortunately, I don’t yet have access to fix that or to reply in Helpscout 
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Kurt! I didn’t see this mention because the “mark” here is someone else. My account on the community site is @brainlid. We probably don’t want to bother the other guy!
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Just to say it’s resolved and thanks to @jsierles for the help.
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After updating flyctl I started hitting this issue. Using --local-only resolved.
My app is not phoenix but it is a somewhat complex build cache that was taking a while to upload. Maybe worth increasing the default timeout?