I've just upgraded to Mac OS X Lion and am running into some 'interesting' quirks...
Try running YARD under Ruby 1.9.2-p290 in Lion
/Users/mdesilva/.rvm/gems/ruby-1.9.2-p290@rails31x/gems/yard-0.7.4/lib/yard.rb:38: [BUG] Bus Error ruby 1.9.2p290 (2011-07-09 revision 32553) [x86_64-darwin11.2.0] -- control frame ---------- c:0024 p:---- s:0071 b:0071 l:000070 d:000070 CFUNC :callcc c:0023 p:0080 s:0068 b:0068 l:000280 d:000280 TOP /Users/mdesilva/.rvm/gems/ruby-1.9.2-p290@rails31x/gems/yard-0.7.4/lib/yard.rb:38
The solution is to upgrade to 1.9.3
Duplicate of #382, this is a bug with Ruby 1.9.2 on xcode 4.x. You should upgrade to 1.9.3 to get continuations working again.