TorqueBox has an integration test failing with JRuby 1.7.0.RC1 because a Rails 2.3.14 template is failing to properly modify config/environment.rb. The issue boils down to some odd behavior in String#gsub when the string contents are read from a file vs a hardcoded string.

Here's a reduction of the Rails template runner logic to demonstrate the issue: https://gist.github.com/d8dc0a4b071104fd0463