There does not seem to be much (if any) advantage of using a Gem to hold the common Whimsy code.
There are some disadvantages: - testing changes to the library code is harder - Gem has to be generated, uploaded and deployed - having the Gem as well as the source code on the same system is confusing as they may differ I think it would be much simpler to reference the library code using a relative RUBYLIB definition. This will mean some changes in order to provide version tags, but those need to be done anyway as the code currently assumes SVN is being used.