TL;DR: The `path` in your `include` block doesn't resolve to a file. The error names both the missing file and the referencing config, so check which side is wrong. Most often `find_in_parent_folders` was aimed at a sibling (it only searches upward) or the filename doesn't match the 1.x `root.hcl` convention.

```text
Include configuration not found: /repo/live/nope.hcl (referenced from: /repo/live/terragrunt.hcl)
```

## Steps

1. Read both paths in the error: the file it wanted, and the file that asked.
   Expected: you can see whether the path or the referencing location is wrong.
2. If the target is an ANCESTOR: `include "root" { path = find_in_parent_folders("root.hcl") }`.
   Expected: the lookup walks up and finds it.
3. If the target is a SIBLING (same directory): use a relative path, which resolves against the config file's own directory:
   ```hcl
   include "envcommon" {
     path = "${get_terragrunt_dir()}/common.hcl"
   }
   ```
   Expected: no upward search for a file that was never above you.
4. Check the filename: 1.x convention is `root.hcl`; asking for `root.hcl` when the file is `terragrunt.hcl` (or the reverse) fails.
   Expected: names match.

## When this applies

- `Include configuration not found` naming a file that exists elsewhere, or a name that doesn't exist at all.
- After renaming the shared config file or restructuring directories.

## When it doesn't apply

- The file is found but won't parse: that's `Include file parse error`; validate the included file with `terragrunt hcl validate --working-dir` on its own directory.
- `ParentFileNotFoundError`: same family, but from `find_in_parent_folders` directly rather than an include path.

## Tool versions

All Terragrunt 1.x (verified on 1.1.3).

## Why it happens

Include paths resolve against the unit, and `find_in_parent_folders` only searches ancestors. A path written relative to the repo root, or aimed at a sibling, resolves to a location where no file exists, and Terragrunt reports both sides so you can tell which assumption broke.

## Edge cases

- The failure surfaces in the UNIT, so when the included file is the problem, read the location line carefully: the file to fix isn't always the file named first.
- BOM or CRLF line endings from a Windows editor in the included file produce a parse error, not "not found"; don't chase the path when the file exists.