I've had the same problem with RadRails... apparently it doesn't recognize a new project unless you use it's built-in tool to create the project (just creating the project outside of RadRails and expecting it to 'see' the project doesn't work).
Create the project as if it were new, turn off all the options, particularly the one that says "Create a new project skeleton" and it will recognize what you already have without disturbing anything that you've already created!
I know, it shouldn't be soo obtuse 
HTH...jon