Pylance goes haywire in VS Code python notebooks

Does anyone know what could cause VS Code to suddenly have syntax highlighting go haywire, and autocompletion/intellisense stop working? I have tried reinstalling VS Code, switching to the VS Code insiders version, disabling unused extensions. No matter what I do a few minutes after opening VS code highlighting goes nuts and Pylance intellisense drops out.

For example:

The only unusual thing I see in the language server output is:

2023-08-10 09:35:08.006 [info] Error: Debug Failure. False expression: Chained file path undefined doesn't match cellFilePaths c:\Users\julian.irwin\OneDrive - Thermo Fisher Scientific\Projects\XXXX\python notebooks\xxxxxxxxx\lamp_noise_study.ipynb:pylance-notebook-cell:X15sZmlsZQ==.py
    at _0x2f5209 (c:\Users\julian.irwin\.vscode-insiders\extensions\ms-python.vscode-pylance-2023.8.20\dist\server.bundle.js:1:1017323)
    at c:\Users\julian.irwin\.vscode-insiders\extensions\ms-python.vscode-pylance-2023.8.20\dist\server.bundle.js:1:1024550
    at _0x3100be.<computed> (c:\Users\julian.irwin\.vscode-insiders\extensions\ms-python.vscode-pylance-2023.8.20\dist\server.bundle.js:1:1024582)
    at _0x72f7ac._onDidChangeNotebookDocumentAsync (c:\Users\julian.irwin\.vscode-insiders\extensions\ms-python.vscode-pylance-2023.8.20\dist\server.bundle.js:1:1003431)

Much of the language server output has path names containing sensitive information so I didn't post the full output. I can scrub and then post them if it would help someone debug this.

Another mysterious fact is that a python file (.py) opened in a different tab works fine. Highlighting and autocompletion are fully function. It is only in the notebook environment that the problem occurs.

Possibly related to this Pylance issue:
https://github.com/microsoft/pylance-release/issues/4685

Suggested solution is to downgrade to Pylance v2023.7.40

Versions:

windows 11
vscode 1.81.0
vscode 1.82.0-insider (also tried with this one!)
python 3.11.1
ipykernel   6.19.4

VSCode Extensions

Jupyter v2023.7.1002162226
Python v2023.14.0
Pylance v2023.8.20

I found the solution.
In my case, some file was corrupted. Find the location of the extension folder which is showing an error.

1. Uninstall all Python extensions
2. Close VS Code
3. Delete that error extension folder
4. Open VS Code and install the recommendations

I noted that only uninstalling extension did not delete the folder, so I am guessing that when reinstall, it just loads from the same files again.

The problem is addressed in this Pylance issue:

https://github.com/microsoft/pylance-release/issues/4685

The solution is to downgrade from Pyalnce v2023.8.xx to v2023.7.40, using the "Install" or "Uninstall" pulldown menu in the VS Code extension listing for Pylance.