Apache2 & Mongrel & Pen - 502 Proxy Error

Hi,
I'm getting an Proxy error when trying to use Filecolumn with my new server setup. Everything else on the site works fine though. I believe the server is timing out but I'm not sure why. He's the info.

- Error when try to upload with Filecolumn
- Debian 3.1 Sarge
- Mongrel Cluster with three instances running
- Ruby 1.8.4
- Pen load balancer

Apache Conf:
<VirtualHost mysite.com:80>
   ServerName mysite.com
   ServerAlias www.mysite.com
   ProxyPass / http://127.0.0.1:8080/
   ProxyPassReverse / http://127.0.0.1:8080/
   ProxyPreserveHost on
</VirtualHost>

Apache Error:
[Mon Sep 18 03:55:54 2006] [error] [client 11.11.111.111] proxy: error reading status line from remote server 127.0.0.1, referer: http://mysite.com/photo/new/6
[Mon Sep 18 03:55:54 2006] [error] [client 11.11.111.111] proxy: Error reading from remote server returned by /photos/create, referer: http://mysite.com/photo/new/6

HTTP Error Message:
Proxy Error
The proxy server received an invalid response from an upstream server.
The proxy server could not handle the request POST /photos/create.
Reason: Error reading from remote server

Any idea why I would keep on getting this error? RMagick seems to be working fine. When I go into irb and type Require "RMagick" it returns true.
Any help would be greatly appreciated.

Cheers,
Eric