Sinatra Application in ./lib and Views, Public Routes Not Working

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I have been setting up my recent Sinatra projects with a standard ruby project layout putting all of the application code within a lib folder. When running locally I have been cding in to the lib folder and just running:

ruby app.rb

I often found that when deploying (WebFaction or Heroku) that I had to make several attempts to get the correct. I then found that thin can load and run using the

thin start --port 4567 -R

Which worked until I tried it on a non trivial application which used (erb) templates and then I started seeing these errors, when viewing 127:0.0.1:4567

Errno::ENOENT at /
No such file or directory - ./views/home.erb
file: template.rb location: binread line: 67

The problem is that we are now a level above where we use to be, not sure whay this has never been a problem in production before.

module AnotherWebApp
  VERSION = '0.0.1'
  class App < Sinatra::Base
    use Rack::MethodOverride
    #set :public_folder, "public" # <-- Old version
    set :public_folder, "#{File.dirname(__FILE__)}/public"   # <-- New Version

    # Older ersions of Thin/Sinatra May require
    set :public, "#{File.dirname(__FILE__)}/public"              # <-- public changed to public_folder in newer release
    set :views, "#{File.dirname(__FILE__)}/views"                # <-- Need to set View

    get '/' do
      erb :home