My mkmf.log showed that gcc (4.8.2 I think) didn't like a specific argument that was being used by atomic on
$ gem install atomic
So I had a very similar situation. The answer for me was to upgrade gcc/gcc-libs and lib tool.
I use Arch linux, and only Arch linux. The proper way to do this is to run
$ sudo pacman -Syu
which upgrades all system packages.
I installed Rails and hadn't run a system update since, which is where the issue came from. In most other *nix distros, you would update to the latest version of these packages by name, i.e. with apt, it would be something along the lines of
$ sudo apt-get update
followed by
$ sudo apt-get upgrade {package-name}