Thanks, I figured it out. No, Dreamweaver was closed.
On a MAC, CS4 installs a new CS4 only version of extension manager. You need to open the old extension manager from dreamweaver CS3, DISABLE all the WA extensions. Quit the manager. Open the CS4 Extension manager, install all the WA extensions and enable them.
The problem was that the computer sees the extensions as already running and installed. The new CS4 manager could not make them run twice..