Sass with erb won't compile

ruby-on-rails ruby sass asset-pipeline erb

This is indeed a problem with sass-rails, as discussed on GitHub.

So this guy wrote this patch, which completely solves the problem.

The Solution

Add to Gemfile:

gem "sass_rails_patch", "~> 0.0.1"

then run bundle and you're good!

ruby-on-rails ruby sass asset-pipeline erb

You can use asset helpers if the erb is only for referencing assets:

background-image: asset-url("rails.png")

...instead of...

background-image: url("<%= image_path('rails.png') %>");