After about an hour on the rails IRC and talking with a friend over instant messaging about possible issues it ended up boiling down to openssl and openssl-dev not being installed. Install those but you’re not done yet.

cd to your ruby directory then go into the ext directory, once in there cd openssl; ruby extconf.rb; make; make install, cd ../; cd zlib; ruby extconf.rb; make; make install

And the shebang line: gem install rails –verbose and you should be all good to go now :)

Hope this helps someone else as google was pretty empty with any “resolved” solutions.