OK... seem to be a couple of problems here.
First, 'gcc' appears in both /bin and /usr/bin. (the directories are actually the same inode -- presumably junctions). However, if /bin precedes /usr/bin in the PATH, then I get the above error message. If /usr/bin, comes first, then it fails with a more understandable error:
+error: crypt.h: No such file or directory
# include <crypt.h>
This was fixed by installing libcrypt-devel.
Then everything worked just fine...
So problem solved!