Not working with Jekyll 3

[a2zarslaan]

When I tried Jekyll serve initially, I got the following message -

Since v3.0, permalinks for pages in subfolders must be relative to the site source directory, not the parent directory. Check http://jekyllrb.com/docs/upgrading/ for more info.

After Googling for a solution, I tried deleting the relative_permalinks from the _config.yml file.
Now when I run Jekyll serve, I get the error -

Dependency Error: Yikes! It looks like you don't have redcarpet or one of its dependencies installed. In order to use Jekyll as currently configured, you'll need to install this gem. The full error message from Ruby is: 'cannot load such file -- redcarpet' If you run into trouble, you can find helpful resources at http://jekyllrb.com/help/!
Conversion error: Jekyll::Converters::Markdown encountered an error while converting '_posts/1928-11-18-debut.markdown':
redcarpet
ERROR: YOUR SITE COULD NOT BE BUILT:
------------------------------------
redcarpet

Please help me resolve this! I love this theme!

[junior-ales]

I've changed the permalink value from /:title to pretty and deleted the relative_permalinks parameter. It worked fine.

(just to give the credit I saw the solution in an other issue of this repo)

[a2zarslaan]

I left the permalink as is and added the baseurl in config as: /projectname
Also, I added {{ site.baseurl }} everywhere before the starting of the directories and especially before {{ post.url }} in the index file. Working smooth since.

Though a new issue have come up now - On the sidebar the thumbnails of new posts are not getting generated. It was automated in gulp file in the project and it should be working right, but on inspecting the element I get error 404. So the thumbnail isn't getting generated.
Any workaround for this?
TIA! :)