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