I finally figured out what was wrong with Bloxsom’s static rendering not rendering. Turns out it was working right all the time. I have the cgi set to do static rendering to /Volumes/Sites, which is the direct path to my iDisk. For some reason MacOS decided to name my iDisk gregjsmith-1 and created a local path for /Volumes/Sites.
In other words, it works now. Obviously because your reading this. iWeb was annoying due to the lack of built in HTML editing. I realize that they are making it as easy as possible but some HTML editing is needed.