I am running Mac OSX 10.9.1 and I am using RVM to manage Ruby v2.0.0-p353.
When I try to install Rails I get this error:
Ryans-MacBook-Air-2:~ ryan$
I had this exact issue as well with the exact environment as you. I tried many things including the link which Alexbhandari added to the comment. I spent hours and finally decided to call it quits and totally wipe all of the ~/.rvm folder and start again.
Warning: this should only be done for new installs without first considering what you might lose things, such as as gemsets you may have built yourself. If however it is a new install you will not loose anything that cannot be replaced.
I renamed the ~/.rvm folder so that I did have a backup and started the whole install process again. This time it worked and I was actually up and running within about 20 minutes as opposed to the hours I had wasted prior trying to fix the issue.
You do this from the terminal window with the mv command. The ~/.rvm directory was in my $home directory:
Stephens-MacBook-Pro-2:~ Steve$ mv .rvm old.rvm
I know this is a drastic step however it worked for me on a new install so I am hoping it will help a newby in the future.