I believe your problem stems from the fact that, for security reasons, DreamHost has disabled allow_url_fopen in their default PHP install.
You have a number of options to overcome this limitation. Firstly, you can rewrite your script to use CURL instead of fopen.
Or, if you are feeling adventureous, you can compile and install your own local copy of PHP and change the options to suit.
A third option is to simply copy the existing PHP executable and ini file from the DreamHost install to a local directory and make any changes needed.
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