One other DropDMG user reported something like this a few weeks ago. The problem seems to be confined to recent versions of Safari. It's as if Safari looks at the beginning of the file, thinks it looks like a .bz2 file, and adds the extension. Personally, I think this is a bug in Safari.
The easiest workaround is to use a zlib-compressed image instead.
Or, you could try changing the MIME types on your server so that Safari knows the file is a disk image. If you have Apache, this could be done by adding the line:
to your .htaccess file.
AddType application/x-apple-diskimage .dmg