I saw in another thread someone saying that they had to get DreamHost customer support to enable CGI for their site. Normally, this is enabled by default, but you might want to check with DreamHost support to be sure.
Here's something else to try. Create a new file with the following contents (not including the asterisks):
print "Content-type: text/html"
import os, sys
print "<strong>Python %s</strong>" % sys.version
for (x,y) in os.environ.items():
print "%s\t%s" % (x, y)
Save it in your root directory with a name like py-test.cgi. Make sure the line that starts with a # is the first line in the file. Also, make sure the file is executable:
$ chmod 755 py-test.cgi
Then, load the URL in your web browser like so:
If it worked, you will see a bunch of lines of text that begin with a line something like:
Python 2.1.3 (#1, Sep 7 2002, 15:29:56)
This is a basic test of whether Python CGI scripts can run on your site. Admittedly, MT is written in Perl, not Python, but I don't know Perl very well. At least this will help verify whether cgi is enabled in general for your site.