I have the same problem?
did you find a solution???
cheers
i'm a beginner, so not sure, but check your config file againstthe rails server version. i think dreamhost is on 1.22. seems like u on 1.16 try rails -v from console
fixed: I have seen this ages ago, but the error message was never so spurious
the problem was dispatch.rb and .fcgi
you need to either create them locally on the dreamhost (linux) box
or run dos2unix on them