rake db:setup broken in latest edge

This was first discovered by Tim Pope and Obie Fernandez. I tried having a go at debugging it tonight and haven't come up with anything solid yet. Here goes.

When trying to run rake db:setup --trace:

initialization⤿ rake db:setup --trace
(in /Users/ryanbigg/Sites/side_projects/initialization)
** Invoke db:setup (first_time)
** Invoke db:create (first_time)
** Invoke db:load_config (first_time)
** Invoke rails_env (first_time)
** Execute rails_env
** Execute db:load_config
rake aborted!
undefined method `new' for Rails::Configuration:Module
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/activerecord-3.0.pre/lib/active_record/railties/databases.rake:4:in `block (2 levels) in <top (required)>'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:636:in `call'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:636:in `block in execute'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:631:in `each'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:631:in `execute'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:597:in `block in invoke_with_call_chain'
/Users/ryanbigg/.rvm/rubies/ruby-1.9.1-p378/lib/ruby/1.9.1/monitor.rb:190:in `mon_synchronize'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:590:in `invoke_with_call_chain'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:607:in `block in invoke_prerequisites'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:604:in `each'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:604:in `invoke_prerequisites'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:596:in `block in invoke_with_call_chain'
/Users/ryanbigg/.rvm/rubies/ruby-1.9.1-p378/lib/ruby/1.9.1/monitor.rb:190:in `mon_synchronize'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:590:in `invoke_with_call_chain'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:607:in `block in invoke_prerequisites'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:604:in `each'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:604:in `invoke_prerequisites'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:596:in `block in invoke_with_call_chain'
/Users/ryanbigg/.rvm/rubies/ruby-1.9.1-p378/lib/ruby/1.9.1/monitor.rb:190:in `mon_synchronize'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:590:in `invoke_with_call_chain'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:583:in `invoke'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:2051:in `invoke_task'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:2029:in `block (2 levels) in top_level'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:2029:in `each'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:2029:in `block in top_level'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:2068:in `standard_exception_handling'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:2023:in `top_level'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:2001:in `block in run'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:2068:in `standard_exception_handling'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/lib/rake.rb:1998:in `run'
/Users/ryanbigg/.rvm/gems/ruby-1.9.1-p378/gems/rake-0.8.7/bin/rake:31:in `<top (required)>'
/Users/ryanbigg/.rvm/rubies/ruby-1.9.1-p378/bin/rake:22:in `load'
/Users/ryanbigg/.rvm/rubies/ruby-1.9.1-p378/bin/rake:22:in `<main>'

Rails::Configuration is actually now Rails::Application::Configuration by the looks of things, but I'm not sure how to set this up in such a way that databases.rake is happy with it.