mod_ruby/RailsDispatcher problems


I'm having some trouble trying to configure mod_ruby 1.2.6 with
RailsDispatcher. When I access my application, the browser shows the
contents of dispatch.rb.

Here's the configuration I'm using:

RubySafeLevel 0
RubyRequire rubygems
RubyRequire apache/rails-dispatcher
RubyTransHandler Apache::RailsDispatcher.instance

<VirtualHost x.y.z.w>

  DocumentRoot /var/www/rails/myapp/public/

  <Directory /var/www/rails/myapp/public/>
    Options ExecCGI FollowSymLinks IncludesNOEXEC Indexes
    AllowOverride All
    Order allow,deny
    Allow from all

  SetHandler ruby-object
  RubyHandler Apache::RailsDispatcher.instance
  RubyOption rails_uri_root /
  RubyOption rails_root /var/www/rails/myapp
  RubyOption rails_env production

  SetOutputFilter DEFLATE

I did some debugging in rails-dispatcher.rb, and in the #handler method,
I noticed it's returning DECLINED at the beginning, because the
r.filename contains the whole path to dispatch.rb, and thus doesn't
match /\Adispatch\.(cgi|fcgi|rb)\z/. Anyone seen this problem too?
Removing the "\A" from the regex makes it match, and it works somehow,
but I get some strange errors (stack level too deep in the templates) which
don't happen in CGI mode.

Anything obvious I could be missing? Anyone using RailsDispatcher at all?