To parse YAML with Ruby, do not use the YAML module, use Psych (which ships with Ruby 1.9.2, though there is also a gem). The reason is that YAML uses the unmaintained Syck library, whereas Psych uses the modern LibYAML:

gistfile1.sh

>> require 'yaml'
>> YAML.load("%YAML 1.1\n---\n'test'")  # %YAML directive not supported
=> "%YAML 1.1 --- 'test'"

>> require 'psych'
>> Psych.load("%YAML 1.1\n---\n'test'")  # all good
=> "test"