With a few minor changes to the install script and help from the webfaction team. I have successfully installed Phalcon on Webfaction Shared Hosting. Webfaction is a great host and even better now that I can use Phalcon.
If you are interested in installing Phalcon on a shared host take a look at Webfaction: http://webfaction.com. Here are the instructions incase anyone needs them: http://community.webfaction.com/questions/13689/phalcon-php Thanks