For some reason, the kinematic positioning & rotating commands have no effect on dynamic meshes. Here's a little code snippet to show you:
set window on
set window size 800, 600
set display mode 800, 600, 32
sync on
sync rate 60
set text size 18
set text font "Verdana"
phy start
make object cube 1, 1.0
make object cube 2, 1.0
position object 1, -3, 0, 0
position object 2, 3, 0, 0
phy make rigid body dynamic box 1
phy make rigid body dynamic mesh 2
phy set rigid body kinematic 1, 1
phy set rigid body kinematic 2, 1
position camera 0, 0, -10
point camera 0, 0, 0
color backdrop rgb( 150, 150, 150 )
do
if upKey( )
phy set rigid body kinematic rotation 2, object angle x( 2 ) + 2.0, 0, 0
endIf
if downKey( )
phy set rigid body kinematic rotation 2, object angle x( 2 ) - 2.0, 0, 0
endIf
if keyState( 17 )
phy set rigid body kinematic rotation 1, object angle x( 1 ) + 2.0, 0, 0
endIf
if keyState( 31 )
phy set rigid body kinematic rotation 1, object angle x( 1 ) - 2.0, 0, 0
endIf
text 10, 10, "Use the AWSD keys to rotate the dynamic box."
text 10, 30, "Use the arrow keys to rotate the dynamic mesh."
center text object screen x( 1 ), object screen y( 1 ) - 50, "Dynamic Box"
center text object screen x( 2 ), object screen y( 2 ) - 50, "Dynamic Mesh"
phy update
sync
loop
Run that, and tell me if the dynamic mesh is rotating for you, 'cause it's not for me.
***EDIT:***
I fixed it.

All I had to do was save the dynamic mesh first, then load it and it would react to the kinematic commands perfectly.