Multiline I18n in Rails 3

This really isnt an I18n question as probably a yaml question. Have you tried:

 body : |
   This is a multi-line string.
   "special" metacharacters may
   appear here. The extent of this string is
   indicated by indentation.

I placed the above in test.yml and in irb:

irb(main):012:0> x= YAML.load(IO.read('test.yml'))
=> {"body"=>"This is a multi-line string.\n\"special\" metacharacters may\nappear here. The extent of this string is\nindicated by indentation.\n"}
irb(main):013:0> x["body"]
=> "This is a multi-line string.\n\"special\" metacharacters may\nappear here. The extent of this string is\nindicated by indentation.\n"

For your specific example try:

error:
  code: |
    Some really
    long error
    message here