You might be feeling annoyed with this problem. (I do)
Problem could be:

your local source cache
Example:   /usr/lib/ruby/gems/1.8/source_cache

; try removing this file (Your path might be different than above given; check your path first using #gem env)
If this does not solves your problem

check your env var REMOTE SOURCES (#gem env)

If it is not gems.rubyforge.org then use following command to install:

#gem install -r gem_name  –source http://gems.rubyforge.org

If this does not solves your problem(is your internet down?)

Borrow gem files from your friend and install them without -r option.

#gem install /path_to/gemname.gem