Installation Getting Stuck with json install error.+issues

I'm sorry if this too basic...

 

I'm trying to install wagn on an Ubuntu 12.04 server.  I'm on step two of the installation guide (http://wagn.org/installation), where I'm trying the command 

 

bundle install --without postgres:memcache:test:debug:development:assets

 

The install begins, but then stops with this information:

 

Gem::Installer::ExtensionBuildError: ERROR: Failed to build gem native extension.

 

        /usr/bin/ruby1.9.1 extconf.rb

/usr/lib/ruby/1.9.1/rubygems/custom_require.rb:36:in `require': cannot load such file -- mkmf (LoadError)

        from /usr/lib/ruby/1.9.1/rubygems/custom_require.rb:36:in `require'

        from extconf.rb:1:in `<main>'

 

 

Gem files will remain installed in /home/michael/.bundler/tmp/10545/gems/json-1.7.7 for inspection.

Results logged to /home/michael/.bundler/tmp/10545/gems/json-1.7.7/ext/json/ext/generator/gem_make.out

 

An error occurred while installing json (1.7.7), and Bundler cannot continue.

Make sure that `gem install json -v '1.7.7'` succeeds before bundling.

 

So, I try gem install json -v '1.7.7' and get this:

 

Building native extensions.  This could take a while...

ERROR:  Error installing json:

        ERROR: Failed to build gem native extension.

 

        /usr/bin/ruby1.9.1 extconf.rb

/usr/lib/ruby/1.9.1/rubygems/custom_require.rb:36:in `require': cannot load such file -- mkmf (LoadError)

        from /usr/lib/ruby/1.9.1/rubygems/custom_require.rb:36:in `require'

        from extconf.rb:1:in `<main>'

 

 

Gem files will remain installed in /var/lib/gems/1.9.1/gems/json-1.7.7 for inspection.

Results logged to /var/lib/gems/1.9.1/gems/json-1.7.7/ext/json/ext/generator/gem_make.out

 

Please note, the same result happens if I use sudo. I'm over my head here, and Google indicates this is a known problem, but with no real solutions. Does anyone know how I can resolve this problem and move on? 

 

Thanks,

Michael