Strange cannot find gem error

[byrnejb]

Perhaps I lack some specific knowledge of how a gem file is supposed
to work but I have encountered something that is, to me. puzzling.

I have this in my Gemfile:

gem 'capybara', :path => '~/projects/capybara-jbb/'

I have this in /Users/byrnejb.projects/capybara-jbb:

$ ll /Users/byrnejb/projects/capybara-jbb
total 160
-rw-r--r-- 1 byrnejb staff 81408 5 Nov 19:50 capybara-0.4.0.1.gem

But bundler does not seem to find it:
$ bundle install
Fetching source index for http://rubygems.org/
Could not find gem 'capybara (>= 0, runtime)' in source at /Users/
byrnejb/projects/capybara-jbb.
Source does not contain any versions of 'capybara (>= 0, runtime)'

However, gem install does:
$ gem install /Users/byrnejb/projects/capybara-jbb/capybara
Successfully installed capybara-0.4.0.1
1 gem installed
Installing ri documentation for capybara-0.4.0.1...
Building YARD (yri) index for capybara-0.4.0.1...
Installing RDoc documentation for capybara-0.4.0.1...

I only have this problem on OSX 10.6.4. Clone the same repository
onto a CentOS-5.5 box and bundle install works fine with exactly the
same directory layout, gem file and Gemfile contents.

What am I missing?