angular-cli >= 1.0.1: File to import not found or unreadable (SCSS build error)

Bug, feature request, or proposal:

BUG

What is the expected behavior?

Angular CLI/Webpack should build without giving SCSS errors.

What is the current behavior?

Getting import unreadable for import in scss file.

ERROR in ./~/css-loader?{"sourceMap":false,"importLoaders":1}!./~/postcss-loader?{"ident":"postcss"}!./~/sass-loader/lib/loader.js?{"sourceMap":false,"precision":8,"includePaths":[]}!./src/assets/styles/custom-app-theme.scss
Module build failed:
@import '~@angular/material/theming';
^
      File to import not found or unreadable: ~@angular/material/theming.
Parent style sheet: stdin
      in /Users/jason/web-app/src/assets/styles/custom-app-theme.scss (line 70, column 1)
 @ ./src/assets/styles/custom-app-theme.scss 4:14-216
 @ multi ./src/assets/styles/ptone.scss ./src/assets/styles/custom-app-theme.scss ./~/cropperjs/dist/cropper.css ./src/assets/styles/pace.css ./~/prismjs/themes/prism-okaidia.css ./src/styles.scss
webpack: Failed to compile.

What are the steps to reproduce?

Try to build project with custom material2 theme (importing ~@angular/material/theming) with angular-cli version >= 1.0.1.

Which versions of Angular, Material, OS, browsers are affected?

Angular 4.1.1 Angular-cli 1.0.1, 1.0.2 Material 2.0.0-beta.3

Is there anything else we should know?

Posting this here as well as in the angular/material2 repo https://github.com/angular/material2/issues/4449. This seems like it is most likely an issue with angular-cli and whatever new scss processors were added in version 1.0.1.

[clydin]

This is caused by an issue with the release today of sass-loader 6.0.4. It appears that a fix is in progress for the issue and hopefully a new release will be available soon.

As a temporary workaround until then you can pin the version to 6.0.3 via: npm i -DE sass-loader@6.0.3

UPDATE: 6.0.5 has been released. The above temporary workaround is no longer needed.

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