I suppose that the problem is with outdated Ruby. According to this: https://github.com/imathis/octopress/issues/142 you should be on Ruby 1.9 (the stable version is now 1.9.3-p327). You can get this directly from Ruby site, but I would suggest using RVM (or rbenv) to setup your Ruby environment.
You can find a guide how to install RVM on your box here: https://rvm.io/rvm/install/
Then installing Ruby 1.9.3 will be as simple as:
rvm install 1.9.3
rvm --default 1.9.3
rvm reload
Then you will have to install all the dependancies with bundle install
(to get bundler
: gem install bundler
) in Octopress root directory.
EDIT:
Also .rvmrc
in Octopress' project root says that it requires Ruby 1.9.3: https://github.com/imathis/octopress/blob/master/.rvmrc