I am noticing tentacles holding on to application files from months ago. I have my policy set to only keep 1 release on the tentacle. Also packages that are here : C:\Octopus\Applications.Tentacle\Packages are not being deleted. This folder just grows on all my tentacle machines. Anytime I have to delete a release and recreate it (ex. to test out a new step in the deploy process) the release is just duplicated and I end up with multiples of the same release (ex. 400, 400_1, 400_2, etc). I would rather have this release deleted and then recreated.
Can you please send through the full deployment log (link in the response from Paul above) from a deployment that should have applied the retention policy, and the DeploymentJournal.xml file from C:\Octopus\Applications\.Tentacle (or the applications folder you have specified).
This will help us investigate why the retention policy is not being applied.