Anyone having this problem: DNG v 5.2 converts *.RW2 from Panasonic G1 fine (though very large: ~44 MB), opens in CS3 bridge and photoshop. But DNG v 5.4 makes dng's that won't open in either (but they are much smaller, ~11 MB). (So I had to revert to v 5.2, to get the Panasonic job done) Both DNG versions work OK with Canon 5DII raw (*.CR2).
Starting with the Lumix LX3, some camera raw files now require special processing before they can be opened.
You need to make some changes in the preferences of the converter to create the larger files (version 1.1) that will be openable in the older version of Camera Raw that you have running in PSCS3.