Error running Heroku bundle - ruby-on-rails

Question

I just updated my Gemfile and upgraded to rails 4.0.0 and ruby 2.0.0. I ran bundle install, bundle update, then pushed to Heroku. Then I migrated the db.
The app works on localhost but shows an application error on Heroku.
So I ran heroku run bundle update, which gave the following error:
You are trying to install in deployment mode after changing
your Gemfile. Run `bundle install` elsewhere and add the
updated Gemfile.lock to version control.
If this is a development machine, remove the Gemfile freeze
by running `bundle install --no-deployment`.
You have added to the Gemfile:
* source: https://github.com/NoamB/sorcery (at master)
* source: rubygems repository https://rubygems.org/
* rails (= 4.0.0)
* sass-rails (~> 4.0.0)
* uglifier (>= 1.3.0)
* coffee-rails (~> 4.0.0)
* jquery-rails
* turbolinks
* jbuilder (~> 1.2)
* sorcery
* thin
* pg
* rails_12factor
* sdoc
* mailcatcher
* rspec-rails
* sqlite3
* foreman
* quiet_assets
You have changed in the Gemfile:
* sorcery from `https://github.com/NoamB/sorcery (at master)` to `no specified source`
This is what my .gitignore file looks like:
# See http://help.github.com/ignore-files/ for more about ignoring files.
#
# If you find yourself ignoring temporary files generated by your text editor
# or operating system, you probably want to add a global ignore instead:
# git config --global core.excludesfile ~/.gitignore_global
# Ignore bundler config
.bundle
# Ignore the default SQLite database.
db/*.sqlite3
db/*.sqlite3-journal
db/development.sqlite3
# Ignore all logfiles and tempfiles.
log/*.log
tmp
.DS_Store
.sass-cache
.ruby-version
Procfile
.rspec
The error on Heroku is just a standard "Application error. An error occurred in the application and your page could not be served."
Here are my Heroku logs