Unable to start Gradle deamon in fresh install of Android Studio 0.8.1

Question

I wanted to start some Android app development with my friend recently. I've installed the latest Android Studio 0.8.1 and cloned github repo. Then, when I try to build the project using Gradle, it is failing with the message:

Caused by: org.gradle.api.GradleException: Unable to start the daemon process.
This problem might be caused by incorrect configuration of the daemon.
For example, an unrecognized jvm option is used.
Please refer to the user guide chapter on the daemon at http://gradle.org/docs/1.12/userguide/gradle_daemon.html

I am using Windows 8.1 64bit, JDK jdk1.7.0_60 64bit and gradle 1.12

I tried to: - disable firewall and antivirus - didn't help
- download gradle manually, unzip and copy to .gradle in my home directory - didn't help
- when I open a blank new app I have same problem
- I moved the app to different directory as my user name contains 'ł' - same issue

Can anyone look at the log and try to help? This is the most annoying kind of issues developer can face - env is refusing to work and you can't code :(

<<< link to log >>>

Answer 1

Finally, after quite long fight last night, I have managed to run Android studio and build project with Gradle... and I hope it will stay so.

So, as @Eugen pointed out, this could be related to the fact that first installation of Android Studio was done for "only current user". Even I have uninstalled it and installed again it was still failing. Last night, I decided to uninstall it and also, manually, remove all remains of android stuff by simply deleting every directory with android, gradle etc. in its name ;)

I have also updated java to 7.65. and installed stand alone Gradle 2.0 and add it to PATH and check it is working.

After that, I done a clean install of android studio and open simple new MyApp project... and it works! Then I opened my other project - also working! I removed Gradle from PATH - still working.

I have no idea what was wrong... probably first installation of Android Studio was not completely correct. And unistalling it, didn't removed everything.

So, I have no clear answer for my issues, but I thought it could be helpful to describe the story. :)