Custome PHP.ini configuration issue

I compiled my own PHP following Dreamhosts instructions on the wiki. Everything went fine as expected except I get a server error with a RewriteRule in .htaccess. When I remove the RewriteRule, it works fine. Looking at my log file I see “Request exceeded the limit of 10 internal redirects”. What do you suggest I do? With Dramhosts PHP.ini, the RewriteRule works as expected with no errors. Down below is my .htaccess:

Options +FollowSymlinks
Options +ExecCGI
AddHandler php-cgi .php
Action php-cgi /cgi-bin/php.cgi
RewriteEngine On

RewriteBase /

RewriteCond %{REQUEST_URI} !^/file/.*
RewriteRule ^(.*)$ /index.php?do=/$1 [L]