Hi Allan,
Thanks for the tips. I suspect $TM_PATH may be the culprit.
1) do you have /usr/bin/ruby? Does /usr/bin/ruby -e 'p :test' work?
2) what does: echo $TM_RUBY (and pressing ⌃R) give in TM?
3) what does: echo $TM_PATH (and pressing ⌃R) give in TM?
4) what does: which ruby (and pressing ⌃R) give in TM?