We shall overcome
So far we've dealt with a network environment that won't let us access the net or accept DAV methods (so GET and POST work but not PROPGET for example), one Kubuntu machine that couldn't install MySQL 'cause it had no net connection, one existing Rails instance that wouldn't work because it needed the MySQL gem but that was only available online and so on ... but we're making progress!
We've moved to two pairs and me fixing up network/environment/server issues and providing ad-hoc help (heh help from somebody that knows nothing about Rails, smart idea huh :D). At Thijs suggestion we're working directly on the trunk which means we're having to merge conflicts as we go (e.g. migration db file numbering overlaps).
We've now got a limited net connection with a squid proxy in the way but we can now work against our proper subversion server and we can blog blog blog blog blog ... too much time in the darkness of the disconnected world. So, you can follow our progress in our subversion server - i'm configuring it now and will post once that's ready.