.htaccess rewrite loop

I'm trying to use the Mailhandler module. My hosting company (dreamhost) doesn't support php imap.

So, I compiled a customized php 5 with additional extensions using their instructions (http://wiki.dreamhost.com/index.php/Installing_PHP5).

Then (per their instructions), I added the following to my .htaccess file:

AddHandler phpFive .php
Action phpFive /cgi-bin/php.cgi

After adding the above code to the .htaccess file, I get an internal server error (500) when visiting my site. In the error log, I get the following error:
Request exceeded the limit of 20 internal redirects due to probable configuration error. Use 'LimitInternalRecursion' to increase the limit if necessary. Use 'LogLevel debug' to get a backtrace.

I think that means I've created a re-write loop of some sort, not sure. But, I don't know how to fix the problem.

Here is the entire contents of my .htaccess file:

#
# Apache/PHP/Drupal settings:
#

# Protect files and directories from prying eyes.
<Files ~ "(\.(inc|module|pl|sh|sql|theme|engine|xtmpl)|Entries|Repositories|Root|scripts|updates)$">
  Order deny,allow
  Deny from all
</Files>

# Set some options.
Options -Indexes
Options +FollowSymLinks

# Customized error messages.
ErrorDocument 404 /index.php

# Set the default handler.
DirectoryIndex index.php

# Override PHP settings. More exist in sites/default/settings.php, but
# the following cannot be changed at runtime. The first IfModule is
# for Apache 1.3, the second for Apache 2.
<IfModule mod_php4.c>
  php_value magic_quotes_gpc                0
  php_value register_globals                0
  php_value session.auto_start              0
</IfModule>

<IfModule sapi_apache2.c>
  php_value magic_quotes_gpc                0
  php_value register_globals                0
  php_value session.auto_start              0
</IfModule>

# Reduce the time dynamically generated pages are cache-able.
<IfModule mod_expires.c>
  ExpiresByType text/html A1
</IfModule>

# Various rewrite rules.
<IfModule mod_rewrite.c>
  RewriteEngine on

  # Modify the RewriteBase if you are using Drupal in a subdirectory and
  # the rewrite rules are not working properly.
  #RewriteBase /drupal

  # Rewrite old-style URLs of the form 'node.php?id=x'.
  #RewriteCond %{REQUEST_FILENAME} !-f
  #RewriteCond %{REQUEST_FILENAME} !-d
  #RewriteCond %{QUERY_STRING} ^id=([^&]+)$
  #RewriteRule node.php index.php?q=node/view/%1 [L]

  # Rewrite old-style URLs of the form 'module.php?mod=x'.
  #RewriteCond %{REQUEST_FILENAME} !-f
  #RewriteCond %{REQUEST_FILENAME} !-d
  #RewriteCond %{QUERY_STRING} ^mod=([^&]+)$
  #RewriteRule module.php index.php?q=%1 [L]

  # Rewrite current-style URLs of the form 'index.php?q=x'.
  RewriteCond %{REQUEST_FILENAME} !-f
  RewriteCond %{REQUEST_FILENAME} !-d
  RewriteRule ^(.*)$ index.php?q=$1 [L,QSA]
</IfModule>

AddHandler phpFive .php
Action phpFive /cgi-bin/php.cgi

# $Id: .htaccess,v 1.66 2005/03/20 19:15:00 dries Exp $