Git pull fails with bad pack header error

Complementing the @Mark Longair's answer:

I had to run the following commands to fix this issue:

git config --global pack.windowMemory "100m"
git config --global pack.packSizeLimit "100m"
git config --global pack.threads "1" 
git config --global pack.deltaCacheSize "512m"

You can see more about these commands in the git documentation git config.

The lines beginning with remote are output from git running on the remote system. The error:

fatal: unable to create thread: Resource temporarily unavailable

... strongly suggests that you've run out of memory on the server, which can happen if you have either:

1. A repository with lots of large files, which can cause re-packing to take a lot of memory.
2. Limited virtual memory - either in general, or just for that account due to the ulimit setting

A suggestion here is to limit the amount of memory that packing may take by logging into the remote system (as the user that git runs as) and doing:

git config --global pack.windowMemory "100m"
git config --global pack.packSizeLimit "100m"
git config --global pack.threads "1"