can you update your 2.3.5 app with just "gem update rails" and change the version # in environment.rb? I did that and lots of errors came out like in console just typing Post.all would show "undefined method `retrieve_connection' for nil:NilClass". Any ideas?
By the way, I have these gems in my environment.rb
config.gem "aws-s3", :version => ">= 0.6.2", :lib => "aws/s3"
config.gem "less"
config.gem "authlogic"
config.gem "be9-acl9", :source => "http://gems.github.com", :lib => "acl9"
config.gem "hash_extension"
config.gem "prawn"