We don't yet have a build of IronPython out that works against SL4; but it will be released shortly. In the meantime, you can build IronPython against SL4 if you want to use the "dynamic" keyword with Python code.
If you have a SL4 build of IPy, then there's another issue, where is script.py in your Silverlight app? If it's in the XAP file, you'll need to tell the DLR hosting API host to look in the XAP; the Microsoft.Scripting.Silverlight.dll lets you do that:
using Silverlight = Microsoft.Scripting.Silverlight;
var runtime = Silverlight.DynamicEngine.CreateRuntime();
var python = runtime.GetEngine("python");
Then the rest of your script will work.