I had the same problem, but in Xcode 6.1.1 - what fixed it for me was to change the configuration file setting to None for the two Pods-related targets, then run pod install again.

The configuration file setting is found by selecting the project (not the target) and then the Info tab.

Don't tinker, Reset.

Step-by-step

1. Show Project Navigator
2. Select Project
3. Select Info
4. In Configurations, select each one, one at a time (Debug, ApplicationUnitTest, Release, etc.), and for each target within said configuration, set configuration to None.
5. Make certain that Based on Configuration File reads 0 Configurations Set or No Configurations Set for each configuration. That is the crux.
6. Quit Xcode
7. rm -rf Pods/ Podfile.lock ; pod install

Once you have allowed pod install in step 7 to do its magic, you may be able to use a custom config and change your configurations.

Go into XCode and open your project settings and under the Info tab, you will see "Configurations" where you can set a configuration file for both Debug and Release. You apparently have already set these to some custom config and CocoaPods wants/needs you to use the Pods config.