There's a real problem if dynamips can't open port 7200 - not sure if that is the error dynagen is objecting to or not.
You say are trying to run the topology directly with dynagen - if yo have not quit GNS3 already, then I would expect the error you see.
I'm not quite sure where this is leading. We started trying to solve a "can't open the console" and have now migrated to"can't open topology with dynagen".
I know it is a simple topology, but post it anyway. I'll have a crack at loading it (probably with a different version of IOS - I have c3640-ik9o3s-mz.124-25a) on using GNS3 0.73 on Windows, Linux and OSX and see what I come up with.
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RedNectarhttp://rednectar.net@rednectarchrisGNS3 WorkBench-a VMware image of Ubuntu with GNS3 and VPCS installed and a collection of exercises/labs