Compass not compiling anymore in older Rails projects?

compass.rb

# Set this to the root of your project when deployed:
http_path = "/"
css_dir = "public/stylesheets"
sass_dir = "app/assets/stylesheets"
http_images_dir = "images"
images_dir = "public/images"

# You can select your preferred output style here (can be overridden via the command line):
# output_style = :expanded or :nested or :compact or :compressed
output_style = environment == :production ? :compressed : :expanded

# To disable debugging comments that display the original location of your selectors. Uncomment:
# line_comments = false
line_comments = environment == :production ? false : true

Remove compass-rails gem from your Gemfile and run the watcher like it's 2007:

$ compass watch