Here's what I think happened: Network Solutions went into a complete tailspin over this recent hack of their file servers, and ran around altering permissions on directories and files left, right, and centre. All of this resulted in some very confused, and messed up applications. There's a peculiar setting in their "FTP and Content Publishing" section called "Reset File Permissions". Now, to my eye there was nothing wrong with the permissions, but maybe it was an Owner/Group thing? Who knows since they still haven't got back to me. With some hesitation I clicked the option, expecting it to break all manner of existing site, apps, etc, etc. Well, it seems to have fixed the Rails app, and the others look OK.
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