"If you decide to install this version let me hear from you EVEN WHEN IT'S SUCCESSFUL!"
OK - I just updated to the 1.15.9 version and everything works. Woohoo!
This was with gems v0.9.4 and Ruby 1.8.6-25. I'd previously had most of the problems described below and I just got my first Gruff graph to display via Rails, which was ridiculously exciting. I really should get out more.