When a site is brand new, it can take up to 3-5 days for DNS to fully propagate. WebFTP works because it's running locally here.
You can FTP to the actual machine: machine_name.dreamhost.com and that'll work. You can find the machine name in the Panel under Manage Users, or click Account Status in the upper right.
Here's an article about how to work with your site in the meantime: