You seem to be trying to use mongrel_cluster, not mongrel per-se...
To debug, skip the init.d script and try starting directly:
mongrel_rails cluster::start -c /etc/mongrel/sites-enabled/test.config
At Engine Yard, we use a very simple mongrel_cluster.yml file:
cwd: /part/to/rails/root environment: production port: 5000 servers: 3
I think it's interesting that your config file uses 'dir:' where ours uses 'cwd:'. I don't use pen, but I find it fascinating that pen configuration is in the mongrel_cluster config file, but perhaps that's correct.