[h-e-w] epstopdf not working in dired

[Joe Riel]

I frequently use the exclamation (!) in dired to execute the program epstopdf 
on postscript files.
The epstopdf uses ghostscript to convert the file to a pdf. Today I updated my 
ghostscript
from 7.00 to 7.03.  Now, running the command from dired gives the following 
error message:

Converting dumb.ps to dumb.pdf .....  (122x88 mm) ... LoadLibrary: Can't load 
gs dll.Can't initialize ghostscript, exiting ...

However, if I start a bash shell inside emacs and execute the command on the 
file all is fine.
Any clues on what I should do or where I should look?

Thanks,

Joe Riel