RedCloth 4.2.1 with Rails 2.3.2 -- something's broken

I'm having a hell of a time getting RedCloth working. Here's my system
info:

gem list rails

*** LOCAL GEMS ***

rails (2.3.2, 1.2.6, 1.2.3)

gem list RedCloth

*** LOCAL GEMS ***

RedCloth (4.2.1, 3.0.4)

admanb$ RedCloth -v
RedCloth 4.2.1

admanb$ rails -v
Rails 2.3.2

The error that you're getting means that RedCloth isn't compiled - try
installing it again, and look out for error messages. You'll need to
have the Xcode tools installed as well.

--Matt Jones