Fatal error: Call to a member function generateDesignExceptionSub() on a non-object

Fatal error: Call to a member function generateDesignExceptionSub() on a non-object

A little bit late but according to Phoenix support this is a known issue.
And the way to fix it is by commenting the entire function

public function showVclUpdateMessage(Varien_Event_Observer $observer)

in

/app/code/community/Phoenix/VarnishCache/Model/Observer.php

Then

Flush caches and restart Varnish

It worked for me on Magento CE 1.8.1