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Might have been a timing issue.  Here's how i resolved it using a reverse connection (<https://devblogs.microsoft.com/python/python-in-visual-studio-code-july-2020-release/>):

`.vscode/launch.json`
```{
    "version": "0.2.0",
    "configurations": [
        {
            "name": "Python: Attach using listen",
            "type": "python",
            "request": "attach",
            "listen": {
                "host": "127.0.0.1",
                "port": 5678
            }
        }
    ]
}```
and in `___main___.py`:
```import debugpy
debugpy.connect(('localhost', 5678))```
With this method, you start the debugger _before_ running `pulumi up`.