It's in your rails root and then ./log/mongrel.log, normally.
If you start mongrel without the -d (daemon) option it will not detach from your console so you can see whatever it's doing straight away. Ofcourse that way mongrel does terminate when you close the terminal.
I don't have a mongrel.log. Should I have that? However I can see what's going on in development.log.
When I try to start with -d nothing happens.
I usually start without -d, and I can see that it starts in the terminal, but then it shows nothing. Maybe it's a setting in mongrel regarding the log that I haven't done.