The PATH is setup. From what I can tell, `passenger-status` just doesn't honor the path for `ruby` and uses `usr/bin/ruby` instead.

The problem is only with the `passenger-status` command. `passenger-memory-stats` works correctly and Passenger itself will run the Rails application. It could very well be a bug in Passenger. And as I type this I'm convincing myself this is a Passenger problem and should not be fixed by a change to `install_ruby`. I'll look into a solution for Passenger some more.