redmine application stopped working, and I cannot upgrade to precanned redmine application

I had a redmine application that was installed quite awhile ago as a "custom install script" application as there was no choice to install a redmine packaged app at the time. This application stopped working for the most part a month or two ago, about 80% (guesstimate) requests just return a directory listing and it has not worked for a few days at all. I have not made any changes to this application and it ran fine for ~ 1 year.

Today I attempted to create a new redmine application from the redmine webfaction package. I then tried to point that application at the old database. This however is not working either. The previous install was something like 0.9.3 and the new one is 1.2.1. Using the instructions at http://www.redmine.org/projects/redmine/wiki/RedmineUpgrade I attempted to upgrade the database, which did not work with:

Missing the i18n 0.4.2 gem. Please gem install -v=0.4.2 i18n

So, I attempted to run that and got

WARNING: Installing to ~/.gem since /usr/local/lib/ruby/gems/1.8 and /usr/local/bin aren't both writable.

WARNING: You don't have /home/me/.gem/ruby/1.8/bin in your PATH, gem executables will not run.

ERROR: Error installing i18n: i18n requires RubyGems version >= 1.3.5

So now I am stuck and nothing works. Any suggestions?

thanks