For that psych error specifically, I always see that error only when the psych gem IS included in the gemfile (because that forces the gem to be installed).

I've found that just removing the Psych gem via `gem uninstall psych` and allowing the code built into 1.9.3 to be used instead works fine and I don't see that error.

Might be specific to versions of bundler/ruby/rubygems/psych involved?