Can't find gems when running rails app

I've got all the gems installed, but when I run a rails app, I get this:

=> Booting WEBrick
=> Rails 2.3.2 application starting on http://0.0.0.0:3000
/usr/local/lib/ruby/gems/1.9.1/gems/activesupport-2.3.2/lib/active_support/dependencies.rb:156:in `require': no such file to load -- local_cache (MissingSourceFile)

Any idea why it can't read my gems?

Travis