iPhone/iPod Touch: Icon dimensions (0x0) don't meet the the size requirements. The icon file must be 57x57 pixels, in .png formatIcon was just fine, so it's unclear what this means. However there are two theories: a) latest Apple iOS update messed up something or b) Apple iTunes Connect server has some issues.
The solution was to reset the system back into a working condition. You would never guess this, so here are step by step instructions (based on Stackoverflow and Apple discussion forum consensus):
- Login to iTunes Connect with your developer account, navigate to "Manage Your Apps" and check bottom of the page for "Application Loader". Download and install (at this moment latest version is v2.5.1).
- Save your project, quit and restart Xcode (I rebooted the whole machine, good to do every now and then)
- Open your project and do Clean and especially Clean Build Folder to remove all possibly cached build files (alt-shift-command-K)
- Create new archive for distribution and re-validate.