I was getting this error after unpacking hpricot with gem unpack hpricot. I also tried rake gems:unpack hpricot but it did nothing...

config.gem: Unpacked gem hpricot-0.8.1 in vendor/gems has no specification file. Run 'rake gems:refresh_specs' to fix this.

The rake gems:refresh_specs command doesn't work, and appears to have been a temporary workaround, so to fix this error I did this:

cd vendor/gems/hpricot-0.8.1
gem specification hpricot > .specification

I had this issue with Rails 2.3.4.