Jruby 1.3.0 + ARJdbc 0.9.1 + jtds 1.2.2 + MSSql 2005 - database.yml format?

Hello All,
I have a standalone ruby script that
demonstrates correct connection to my sqlserver database (jdbc.rb in
pastiehttp://pastie.org/529254)
that succeeds.

I have a Rails 2.3.2 app with this database.yml in
pastiehttp://pastie.org/529254
.
tds-1.2.2.jar is located in $RUBY_HOME/lib/ruby/1.8/java. I have also
tried
unpacking the jar to the same location.
That location is included in $: for both irb and script/console and
script/runner
This errors with (extended out in pastie http://pastie.org/529254)

The driver encountered an error: cannot load Java class
net.sourceforge.jtds.jdbc.Driver

Any advice or hints on what I could be missing would be greatly greatly
appreciated.

Peter F.
(847) 687-7646
Email: [email protected]
IM GTalk: peter.fitzgibbons
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Did you ever manage to resolve this issue - I wish to do something
similar with a Sybase DB

Thanks
S