Rails 1.2.3 and lighttpd not working together

I have a rails dev machine running freebsd 6.2.
It has the latest ruby 1.8.6, rails 1.2.3, and lighttpd 1.4.16
When i create a new app, and start script/server I get the typical msg
saying that its booting lighttpd and that Ctl+C will kill the server.
However, when i try to access the webserver it doesn’t respond.
When I hit Ctrl+C it says “exiting” but then it just hangs there.
Using ‘top’ i can see that there’re 2 ruby processes that are pinning
the cpu. They wont terminate so i have to kill -9 them.
If i start script/server webrick, my app is online with no problems

I’ve already tried googling for solution, nothing I could find solved
my problem.

Anybody knows fix this?

PS. I’ve previously used lighttpd with rails 1.1.x on freebsd 6.2 and
never had a problem.