There's a lot of confusing information about this error online. It appears to be some issue with crypto in TLS where the previously-agreed-upon MAC is no longer valid, or something.

Most of the workarounds people recommend involve turning off TLS on the server or client.

For the moment, what I have for you to try is a patch to net/http that makes it avoid TLS:

diff --git a/lib/ruby/1.9/net/http.rb b/lib/ruby/1.9/net/http.rb
index 2087066..1ef193c 100644
--- a/lib/ruby/1.9/net/http.rb
+++ b/lib/ruby/1.9/net/http.rb
@@ -773,6 +773,7 @@ module Net   #:nodoc:
         end
         @ssl_context = OpenSSL::SSL::SSLContext.new
         @ssl_context.set_params(ssl_parameters)
+        @ssl_context.options = OpenSSL::SSL::OP_NO_TLSv1
         s = OpenSSL::SSL::SSLSocket.new(s, @ssl_context)
         s.sync_close = true
       end

I applied the patch, but still ran into the problem. Please see the latest trace here:

https://gist.github.com/nirvdrum/6825710

these have been resolved along the way ... let us know if I missed something and this is still relevant.