Gemfile with rails 3.1.1 blowing stack in middleware reloader

Gemfile

source 'http://rubygems.org'

gem 'rails', "~> 3.1.1"
gem 'pg'
gem 'ar-octopus', :require => "octopus", :git => 'git@github.com:AcademicWorks/octopus.git'
gem 'devise'
gem 'devise_invitable'
gem 'aasm'
gem 'foreigner'
gem 'logging'
gem 'resque'
gem 'resque-scheduler'
gem 'resque-cleaner'
gem "redis-store"
gem 'jquery-rails'
gem 'kaminari'
gem 'chronic'
gem 'omniauth', "~> 0.3.0rc3"
gem 'activerecord-import'
gem 'airbrake'
gem 'rpm_contrib'
gem 'newrelic_rpm'
gem 'liquid'
gem 'exception_notification', :git => 'https://github.com/smartinez87/exception_notification.git'
gem 'aws-sdk', :require => 'aws'
gem 'RedCloth'
gem 'encryptor'
gem 'simple-graphite'
gem 'john-hancock'
#gem 'rails_admin', :git => 'https://github.com/sferik/rails_admin.git'
#gem install linecache19 -- --with-ruby-include=$rvm_path/src/ruby-1.9.3-preview1

group :production do
  gem 'unicorn'
end

group :assets do
  gem 'sass-rails',   '~> 3.1.4'
  gem 'coffee-rails', '~> 3.1.1'
end

group :assets, :development do
  gem 'uglifier', '>= 1.0.3'
end

group :development do
  gem 'mailcatcher'
  gem 'rails-footnotes'
  gem 'pry'
  gem 'rack-perftools_profiler', :require => 'rack/perftools_profiler'
  #gem 'rails-dev-boost', :git => 'git://github.com/thedarkone/rails-dev-boost.git'
  gem 'hirb'
  gem 'wirble'
  gem 'awesome_print'
  gem 'ruby-debug19', :require => 'ruby-debug'
  gem 'mongrel', '>=1.2.0.pre2' #for omniauth/openid goodness
  gem 'capistrano'
  gem 'capistrano-ext'
  gem 'faker'
  gem 'annotate', :git => 'git://github.com/ctran/annotate_models.git'
  gem 'therubyracer'
  gem 'rb-fsevent', :require => false #if RUBY_PLATFORM =~ /darwin/i
  gem 'guard'
  gem 'guard-shell'
  gem 'guard-rails'
  gem 'guard-spork'
  gem 'guard-minitest'
  gem 'guard-livereload'
  gem 'guard-process'
  gem 'yajl-ruby'
end

group :test do
  gem "factory_girl_rails", "~> 1.1", :require => false #we use this to generate a css layout test page
  gem 'shoulda'
  gem 'escape_utils'
  gem 'capybara'
  gem 'launchy'
  gem 'database_cleaner'
  gem 'rr'
  gem 'capybara-webkit'
  gem 'spork', '~> 0.9.0.rc'
  gem 'spork-testunit'
  gem 'timecop'
end