There are variations of this question bouncing around SO, but none of them seem to have an answer that solves my problem.
I am running OSX Lion (10.7.3). The latest
Rather than updating RVM itself (https://stackoverflow.com/a/10430742/2807795), as above, it was the reinstallation of Ruby 2.0.0-p247 that did the trick, after trying all the other steps above without success.
rvm get head rvm install 2.0.0