Thanks ya2yaml is good suggestion. Took a look at it and it does the 
right thing (and would work except I had trouble getting it to play nice 
with active record etc.).  I did come up with a different solution that 
I'm posting here in case other people run into the same issue.

monkey patching String can force YAML to use \ escaping rather then 
binary and therefore return strings in the default encoding (UTF-8) 
rather then ASCII-8BIT

class String
  def is_binary_data?
    encoding == Encoding::ASCII_8BIT unless empty?
  end
end

originally this routine uses some heuristics around which would be 
shorter \ escaping of binary encoding of the string which is why only 
some of the international strings I had were having problems.
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