AppleScript dialog not working in Hazel

I'm using the latest version of Hazel and the AppleScript "display dialog" isn't working for me. I stripped everything else out and just set Hazel to run the following if a file was added to a folder;
It doesn't work for me on the latest versions of Mountain Lion and Lion. Does anyone else encounter this problem?
I've also also had problems with Hazel using AppleScript and MountainNotifier (CLI tool for Notification Centre messages). If I run the AppleScript "normally" (not through Hazel) is works fine, and if I run it through Hazel as a shell script it also works fine. I only get the problem using it with AppleScript through Hazel.
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display dialog "Test Message"
It doesn't work for me on the latest versions of Mountain Lion and Lion. Does anyone else encounter this problem?
I've also also had problems with Hazel using AppleScript and MountainNotifier (CLI tool for Notification Centre messages). If I run the AppleScript "normally" (not through Hazel) is works fine, and if I run it through Hazel as a shell script it also works fine. I only get the problem using it with AppleScript through Hazel.