I finally got Capistrano running. The last hurdle was a funky one having to do with subversion. Our deployment environment is 2 web/application servers and one db server. We have another machine that hosts our subversion repository.

The issue was that each machine has to check out from the subversion server. When they went to do that, there was a message to accept the server or not. This would hang Capistrano.

To solve it, ssh into each of your web/app/db machines. From each, check out from the subversion server interactively and choose to permanently accept the svn server.