Incomplete headers :/

Hey,

Cant get my app (Beast, http://beast.caboo.se) to work, keep getting incomplete headers. I followed these steps:

1. in dreamhost control panel, create a sub-domain called y.x.com.
2. make sure FastCGI is enabled.
3. point the web root to y.x.com/trunk/public.
4. svn checkout http://svn.techno-weenie.net/projects/beast/trunk.
5. rake freeze_edge.
6. gem install RedCloth (already installed).
7. copy config/database.example.yml to database.yml and set it correctly.
8. rake db:schema:load RAILS_ENV=production (complains about ActiveRecord::VERSION, without RAILS_ENV param works fine).
9. change SALT in config/environment.rb.
10. update .htaccess so RewriteRule points to dispatch.fcgi.
11. add the RailsFCGIHandler class in dispatch.fcgi as dreamhost wiki explains.
12. update shebang line in public/dispatch.cgi, public/dispatch.fcgi and public/dispatch.rb.
13. set ENV['RAILS_ENV'] to ||= 'production' in config/environment.rb.
14. check permissions, specially public and log dirs (u+rwX,go-w).
15. check if all worked - alas, std 500 error response:

Application error
Rails application failed to start properly

Log files contains this:

logs/production:

Traced output of the command that failed in step 8:

[silk]$ rake db:schema:load RAILS_ENV=production --trace
/usr/bin/rake:17:Warning: require_gem is obsolete. Use gem instead.
(in /home/.mehalia/cbermar/c.deepdarkhole.net/trunk)
** Invoke db:schema:load (first_time)
** Invoke environment (first_time)
** Execute environment
Install the ruby-openid gem to enable OpenID support
rake aborted!
uninitialized constant ActiveRecord::VERSION
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../vendor/rails/activerecord/lib/../../activesupport/lib/active_support/dependencies.rb:266:in `load_missing_constant'
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../vendor/rails/activerecord/lib/../../activesupport/lib/active_support/dependencies.rb:452:in `const_missing'
/usr/lib/ruby/gems/1.8/gems/gettext-1.8.0/lib/gettext/active_record.rb:49
/usr/local/lib/site_ruby/1.8/rubygems/custom_require.rb:27:in `gem_original_require'
/usr/local/lib/site_ruby/1.8/rubygems/custom_require.rb:27:in `require'
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../vendor/rails/activerecord/lib/../../activesupport/lib/active_support/dependencies.rb:495:in `require'
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../vendor/rails/activerecord/lib/../../activesupport/lib/active_support/dependencies.rb:342:in `new_constants_in'
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../vendor/rails/activerecord/lib/../../activesupport/lib/active_support/dependencies.rb:495:in `require'
/usr/lib/ruby/gems/1.8/gems/gettext-1.8.0/lib/gettext/rails.rb:435
/usr/local/lib/site_ruby/1.8/rubygems/custom_require.rb:32:in `gem_original_require'
/usr/local/lib/site_ruby/1.8/rubygems/custom_require.rb:32:in `require'
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../vendor/rails/activerecord/lib/../../activesupport/lib/active_support/dependencies.rb:495:in `require'
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../vendor/rails/activerecord/lib/../../activesupport/lib/active_support/dependencies.rb:342:in `new_constants_in'
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../vendor/rails/activerecord/lib/../../activesupport/lib/active_support/dependencies.rb:495:in `require'
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../config/environment.rb:68
/usr/local/lib/site_ruby/1.8/rubygems/custom_require.rb:27:in `gem_original_require'
/usr/local/lib/site_ruby/1.8/rubygems/custom_require.rb:27:in `require'
/home/.mehalia/cbermar/c.deepdarkhole.net/trunk/config/../vendor/rails/railties/lib/tasks/misc.rake:3
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:387:in `call'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:387:in `execute'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:387:in `each'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:387:in `execute'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:357:in `invoke'
/usr/lib/ruby/1.8/thread.rb:135:in `synchronize'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:350:in `invoke'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:364:in `invoke_prerequisites'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:999:in `each'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:999:in `send'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:999:in `each'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:363:in `invoke_prerequisites'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:356:in `invoke'
/usr/lib/ruby/1.8/thread.rb:135:in `synchronize'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:350:in `invoke'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:1906:in `run'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:1906:in `each'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/lib/rake.rb:1906:in `run'
/usr/lib/ruby/gems/1.8/gems/rake-0.7.1/bin/rake:7
/usr/bin/rake:18:in `load'
/usr/bin/rake:18

Any ideas? Seems to be something with GetText?