Gems offer prebuilt software components for the Ruby / Rails space. What they don't offer, when used as a gem, is the ability to modify their source code. Unlike a traditional Rails plugin which was installed into your application tree, gems tend to exist in a magical, hidden bundle location. When you can do, however, is "vendor gem" them so that you can easily modify / update them. Ideally we'd all make our changes as pull requests against the canonical git repo but sometimes there isn't time. So here are the steps:

1. Install a gem into your Gemfile.
2. run bundler: bundle install
3. Unpack it. Here's an example: gem unpack anemone
4. This will put it into the root dir of your Rails application so now move it to vendor/gems: mv anemone-0.7.2 vendor/gems
5. Go into your gem file and modify the line:
   gem 'anemone'
   to look something like this:
   gem 'anemone', '0.7.2', :path => "vendor/gems/anemone-0.7.2"
6. run bundler again:
   bundle install
7. Git add / commit / push

Thanks to Jared for helping me (once again) with this. Hopefully now that I took the time to document it, it won't be as hard next time…