There are a few ways to reduce your 500 Internal Server Errors on Dreamhost.
For one, move to the site to it's own user account. If you run multiple sites under one user these all share the same RAM resources making it easier to hit that magic limit and trigger there process watcher to kill your processes.
Your peak usage of 35.4MB is on par with my WordPress set-up and it seems to be doing much better under it's own user account.
