I have a rails 2.3.5 application with an API I wish to protect.
There is no user - it is an app to app style webservice (more like an Amazon service than facebook), and
I'm not aware of any alternatives to oauth-plugin at the moment, though it is definitely getting long in the tooth and ripe for a replacement. My recommendation is to generate the oauth server from oauth-plugin, then extract the dependencies from the plugin (which are just a couple modules worth of methods) and trash the plugin. Then tweak everything to your needs. 2-legged oauth should not be a big problem since it is simpler than 3-legged anyway, and my feeling is that oauth-plugin is not usable these days without significant modifications anyway.
The meat of OAuth has long been extracted into the base oauth gem anyway, so the oauth-plugin is sort of in limbo. The architecture makes some heavy-handed assumptions about what authentication system you are using, and the generated code is dated. So to me, oauth-plugin serves more as an example of how to wire everything up rather than something that most sites would want to use out of the box.
Previously, the only good answer was to hack about in the oauth-plugin to get this subset of the oauth interaction. Since then, the oauth-plugin was refactored, and now you can use it straight up, just by adding the right type of authentication filter to your controller:
class ApiController < ApplicationController
include OAuth::Controllers::ApplicationControllerMethods
oauthenticate :strategies => :two_legged, :interactive => false
# ...
end