UPDATE: Colin\'s suggestion of removing the line //= require_tree . has fixed the issue.
I have wasted over 2 days trying to follow every suggestion
I had to add my nodejs folder to my Windows Path environment variable. In Windows 8 open the Control Panel, go to System, Advanced system settings (on the left), click Environment Variables on the left, and edit the Path variable to include the directory to your nodejs folder (probably in Program Files).
Of course you have to have Node.js installed (use the Windows installer) and have installed CoffeeScript through NPM.