New to sass, getting error: [Errno 2] No such file or directory

New to sass, getting error: [Errno 2] No such file or directory

I'm new to Sass and, while I've managed to successfully install it, I'm
getting permission denied when I actually try to use it. I'm using sublime
text 2, the current version of ruby, and the bones theme.
Here is a screenshot of terminal/code: http://i.imgur.com/5mzW8MM.png
Here is what it says when I save in SublimeText.
[Errno 2] No such file or directory
[cmd: [u'sass', u'--update',
u'/Users/jschreiber/sites/wp-content/themes/eddiemachado-bones-405349e/library/scss/_base.scss:/Users/jschreiber/sites/wp-content/themes/eddiemachado-bones-405349e/library/scss/_base.css',
u'--stop-on-error', u'--no-cache']]
[dir:
/Users/jschreiber/sites/wp-content/themes/eddiemachado-bones-405349e/library/scss]
[path:
/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/local/bin:/usr/bin:/bin:/usr/sbin:/sbin]
[Finished]
Edit with gem env:
administrators-MacBook-Air:~ jschreiber$ gem env
RubyGems Environment:
- RUBYGEMS VERSION: 2.0.7
- RUBY VERSION: 2.0.0 (2013-06-27 patchlevel 247)
[x86_64-darwin12.3.0]
- INSTALLATION DIRECTORY:
/Users/jschreiber/.rvm/gems/ruby-2.0.0-p247
- RUBY EXECUTABLE:
/Users/jschreiber/.rvm/rubies/ruby-2.0.0-p247/bin/ruby
- EXECUTABLE DIRECTORY:
/Users/jschreiber/.rvm/gems/ruby-2.0.0-p247/bin
- RUBYGEMS PLATFORMS:
- ruby
- x86_64-darwin-12
- GEM PATHS:
- /Users/jschreiber/.rvm/gems/ruby-2.0.0-p247
- /Users/jschreiber/.rvm/gems/ruby-2.0.0-p247@global
- GEM CONFIGURATION:
- :update_sources => true
- :verbose => true
- :backtrace => false
- :bulk_threshold => 1000
- REMOTE SOURCES:
- https://rubygems.org/