I'm having the same problem... it seems that the only working locale is en_US
DreamHost admins take a look at this solution:
you may have encountered that setlocale is not working at all, even though you have the files in the /usr/share/locale directory and everything was fine before the upgrade. in this case look at the /etc/locale.gen file, which contains the generated locales. if it is empty, you do not have any useful locales. to generate the needed locales run 'dpkg-reconfigure locales' as root and select the locales you need.
I need "es"