I thought I'd save some other people some hassle.
Something changed at dreamhost and my rails sites stopped loading correctly. Instead of getting my website, I was getting a passenger error:
Permission denied – /root/.gems
The problem is easy to fix:
To the top of your config/boot.rb file.
So my config/boot.rb now looks like this:
gem 'bundler' #koz added http://stackoverflow.com/questions/2282969/rails3-server-and-bundler-error-uninitialized-constant-bundler-nameerror
# Set up gems listed in the Gemfile.
gemfile = File.expand_path('../../Gemfile', __FILE__)
ENV['BUNDLE_GEMFILE'] = gemfile
rescue Bundler::GemNotFound => e
STDERR.puts "Try running `bundle install`."
end if File.exist?(gemfile)
Hope this helps someone else avoid having to figure it out.