I was having the same problems trying to import Blogger (new API) into WordPress 2.3.3, using external hosting (GoDaddy). The fix that worked for me, was to import all the Blogger posts to a wordpress.com blog, and then export into XML format from there. Then you can re-import everything back into your own blog.
It was posted above, but I just wanted to confirm that this works for 2.3.3