I recently came across this issue whilst trying to update a Commerce Kickstart installation via Drush. Error reads:
The commerce_kickstart directory could not be found within the modules directory at [error]
/srv/www/carmarket.ph/public_html/profiles/commerce_kickstart, perhaps the project is
enabled but has been deleted from disk.
There were several modules that needed updating below, so ./drush -u 1 up seemed the proper drush command to update them all in one go.
As it turns out from the discussion here, Drush is unable to do its job on Distributions, (so it is not just an issue limited to Commerce Kickstart).
Solution, update the modules one by one. Eg.,
sudo ./drush -u 1 up term_merge
to the following projects: Term Merge [term_merge-7.x-1.2]
Do you really want to continue with the update process? (y/n): y
Project term_merge was updated successfully. Installed version is now 7.x-1.2.
Backups were saved into the directory [ok]
/home/ghm33/drush-backups/carmarket/20150806022606/modules/term_merge.
'all' cache was cleared in /srv/www/carmarket.ph/public_html#default [success]
No database updates required [success]
Finished performing updates.
Voila!
