Wagn is defaulting to production mode as of Wagn 1.8. If you want to modify wagn code, you'll want to use development mode instead.
You'll also need to install several more gems. Go to .bundle/config and remove, at a minimum, "development" and "assets" from the "without" list.
#ENV['RAILS_ENV'] ||= 'production'
(Note that it will remained commented in all git branches but master and stable).