is not checked out... bundle install does NOT fix help!

This error can be related to the spring gem. Regenerating spring binstubs worked for me.

bundle exec spring binstub --all

https://github.com/rails/spring/issues/387

You're probably running Passenger. This is the issue with some solutions - http://code.google.com/p/phusion-passenger/issues/detail?id=505

Try running bundle install --deployment

For me it was just a matter of adding this to gemfile:

source 'http://gems.github.com'

for the guys that stuck with "bundle & git repo " problems.

1. $ bundle pack
2. $ bundle install --path vendor/cache

more details, please refer to https://stackoverflow.com/a/5268534/445908