Error 500 with custom buttons

I have an existing project where the List page has various custom buttons. I added a new (& basic) button with nothing changed from the sample code. Then I began getting the below error message from Chrome Javascript console.
POST http://localhost/lgms/buttonhandler.php 500 (Internal Server Error) - loadfirst.js:4

send - loadfirst.js:4

f.extend.ajax - loadfirst.js:4

f.(anonymous function) - loadfirst.js:4

Runner.form.Button.Runner.extend.clickHandler - RunnerAll.js:3293

callHandler - RunnerAll.js:2100

f.event.dispatch - loadfirst.js:3

h.handle.i - loadfirst.js:3
Now ALL my buttons do not work anymore. I remove that new button and the problem STILL persist.
I also have backed up my previously built application. If I copy the buttonhandler.php from the old project to the current project, then all is well again.
Has anyone experienced this? Any clue on what is happening?