Cannot find gem for Rails

I’ve been working with Ruby on Rails through Locomotive for the past
year or so, but for this particular task, I need to run a Rails
application outside the Locomotive environment. I can create a Rails
application just fine, using “rails my_app”, and it boots up properly
in Mongrel, but whenever I run rake to migrate my database, I get the
following error:

Cannot find gem for Rails ~>
Install the missing gem with ‘gem install -v=1.2.2 rails’, or
change environment.rb to define RAILS_GEM_VERSION with your
desired version.

I have tried everything I can think of: re-installing Rails with gems
by copying-and-pasting the line above into the terminal (as superuser
of course), pasting the rails_gem =‘rails’… line
from my boot.rb into irb (which does execute correctly), but I still
can’t get rake to run. Does anyone have any tips?

Thank you very much,

System configuration:

G4 PowerBook, with OS X 10.4.8.
I’ve installed Ruby, Gems, and Rails:
rschenk$ ruby -v
ruby 1.8.5 (2006-12-25 patchlevel 12) [powerpc-darwin8.8.0]
rschenk$ gem -v
rschenk$ rails -v
Rails 1.2.2

When I type ./script/about:
About your application’s environment
Ruby version 1.8.5 (powerpc-darwin8.8.0)
RubyGems version 0.9.2
Rails version 1.2.2
Active Record version 1.15.2
Action Pack version 1.13.2
Action Web Service version 1.2.2
Action Mailer version 1.3.2
Active Support version 1.4.1
Application root /Users/rschenk/Desktop/
Environment development
Database adapter mysql