Additional uncaught exception thrown while handling exception.

From the project page -

Upgrade from v2.x to v3.x - not supported ATM, it should be possible but we won't test it before 3.x is ready for production use. if you have a running site using v2.x - you're good, stick with it. we'll try to backport all important updates from v3.x to v2.x.

Here a few pointers because you're not the first to try this -
When trying to update Sasson from v2.x to v3.x you should :

1. Make sure Sasson v3.x will work on your environment with a clean fresh install - you'll have to have Compass installed and make sure you don't have any issues with assetic - there seem to be some issues on windows, should be solved soon, Check assetic's issue queue for more info.
2. Fix your Sass syntax - since v2.x was using PhamlP and v3.x is using ruby-compass, there might be some syntax modifications needed. e.g. @include linear-gradient(color-stops(#fefefe , #eaeaea), top); should become @include background(linear-gradient(top, #fefefe , #eaeaea));. Check Compass documentation for more info.
3. Clear your cache.

If you still get errors, please open an issue with the full error message or at least with the exception itself (it may be more readable when you "view source").

Most important - keep in mind that v3.x is currently a development branch, though it is very much functional and we are using it daily, some changes may still happen before it hits a stable release.

Well, the 3.x version of Sasson is awesome already, but it is still a dev branch. if you prefer a stable version, go with 2.x (as I said, we'll try to backport all important updates from v3.x to v2.x).
On the other hand, getting it to work on linux should be very very easy:

sudo apt-get install ruby1.9.1
gem install compass

Simple, v2 had a Sass compiler written in php built-in, it was great but not perfect. meanwhile, the original ruby compiler is being improved by a big community of developers while the php compiler was left behind.
The nice thing about including assetic, is that it is a bridge between Sasson and any compiler (not only CSS compilers, even for compiling coffeeScript to js, or for compressing images - it is very powerful) so we can, theoretically, implement other compilers as well (like scssphp which already has an assetic filter).

I've installed ruby successfully but gem install gives 'command not found'.
even did apt-get install gem -y - something got installed but I am still getting 'command not found' when I try to install compass (gem install compass). This is an Ubuntu server.

Is rubygems also installed successfully and the path configured? Ubuntu guide.

Cleaning up