DamageControl does not run on Debian & Ubuntu

System setup:

ruby 1.8.2 installed from the repository
gem installed by downloading source and installing
rails and other dependencies installed through gem
damagecontrol pulled from subversion

output from version 1474 and 1475:

blarsen@sunny:~/dc/trunk/damagecontrol$ ruby -Ilib -I../rscm/lib script/daemon
Rails Error: Unable to access log file. Please ensure that log/development.log exists and is chmod 0666. The log level has been raised to WARN and the output directed to STDERR until the problem is fixed.
./script/../config/environment.rb:84: undefined local variable or method `basedir' for #<Object:0x2a955cc380> (NameError)
from script/daemon:3:in `load'
from script/daemon:3

version 1473 works fine.

it appears that "require 'damagecontrol/app'" line is loading something other than lib/damagecontrol/app.rb. By changing the require line I can fix this error, but I create a cascade of other errors.

I haven't (yet) learned ruby or rails, so I haven't tracked it down further.