I have not been able to play on my own server since the update.
I have done as requested which is;
Client side:
Delete the mods folder
unsubscribe from all mods
verify game files (checks out OK)

Server side:
Delete mods folder
deleted and reinstall server
added only add mods that are 1.7 compliant.
reloaded mods

ran the server and when the client connected they downloaded the mods and I still get the error.
I have also gotten this error on community servers.