Problems with incorporating markdown into a project

[Ryan Booker]

I'm using Markdown in my personal CMS project.  Locally on my Mac (OSX
Tiger) I have html2text, Markdown and SmartyPants both running without
any problems.

When I make a post I run it through Markdown.pl then SmartyPants.pl
then save it in the db.

When I edit a post I run it through html2text.py (by aaron swartz) so
that the html is stripped and replaced by markdown syntax.

This works perfectly on the mac.

As soon as I upload this to my Textdrive account, it no longer works. 
Markdown refuses to correctly convert referenced links to html. 
Though all other markdown syntax continues to work.  The referenced
links are left as markdown syntax rather than being converted to html.
 Inline links work fine.

Any ideas?

Cheers,
Ryan