I also installed Docker 2.2 yesterday and immediately ran into the same problems:
ERROR: for app Cannot start service app: error while creating mount source path ‘/host_mnt/c/projects/myproject…’: mkdir /host_mnt/c/projects: file exists
ERROR: Encountered errors while bringing up the project.
I tried sharing the C drive - restart, reboot, etc, no luck. Uninstalled and reinstalled and got the same issue. Uninstalled and deleted the docker files in ProgramData. No luck. Wait, why were those files still there after an uninstall? That’s stupid.
Went back to version 2.1. It works!
Some testing by actual humans would be nice.