The problem in a nutshell is that in development mode we\'d make changes to CSS or JS files but would always get cached/old versions of these files. Nothing I did had any effect
Have you checked out this devise issue on github? Specifically Jose Valim says
Rails 3.1.1 final has a method called config.assets.initialize_on_precompile. If you set it to false, you should be good but it won't allow you to access model information on your assets (which you probably shouldn't anyway).
Maybe this will allow the precompile to happen on Heroku for you.