Zed Shaw cut a new release of Mongrel today (0.3.13.3). In addition to a couple of bug fixes, it also features new licensing, being released under the same terms as Ruby instead of the LGPL. Zed says this is a first step along the path to getting Mongrel into Ruby.
PS Zed's also settled on a mascot for Mongrel bugs ... sadly, it's a dog, not a flea. You just no convincing some people.