I'm sorta surprised nobody's replied to this thread yet with what's going on!
Well, we're still not sure why, but all of the sudden last night our main DreamHost db (which was somewhat recently upgraded to mysql 4.0) started freaking out whenever it reached 500 connections. And by freaking out, I mean not working at all and not able to be stopped. And rebooting the machine just means a few HOURS waiting for all the table checks to complete.. plus the same thing keeps happening.
When the dreamhost db is down, the web panel is down, signups are down, and webmail is down (though customer sites and regular email access should be unaffected).
After trying a bunch of stuff (all sorts of configuration options were tweaked, etc..) we're now almost done downgrading the server back to mysql 3.23. This is super sucky, and we're sorry it's taken so so long! We can't even make a regular announcement-type announcement because that uses the dreamhost db!
Somebody should have put an explanation up on the generic "performing maintenance" page though. Our apologies for that, we've just been all busy half-way panicing through the db troubles.