Puppet users - Jun 2014 - Exception LoadErrror with Passenger and Apache httpd

I have been running my puppetmaster with passenger and apache httpd 
successfully for sometime now. During a recent upgrade to Puppet 3.6.1, I 
am seeing this following exception in /var/log/httpd/error_log :

 *** Exception LoadError in PhusionPassenger::Rack::ApplicationSpawner (no 
such file to load -- rack) (process 3072, thread
#<Thread:0x7f2d85cfb368>):

I tried setting my gem environment in the config.ru, but that didn't seem 
to help. I see that the puppet 3.6.1 gem is installed. I installed puppet 
3.6.1 via RPM not gem. I also ran gem clean to no avail.

Any idea how to get past this error? I see that the puppet 3.6.1 gem has a 
rack - maybe it can't be found in my path?

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