UPDATE: This bug has been fixed
Calendars embedded in a Google Site are currently (June 2011) displaying as timezone PST unless the user viewing the calendar has their timezone set.
This issue has been reported and is currently being worked on and should be fixed at some point in the future
A workaround is
for Google Apps users to go to https://sites.google.com/a/...DOMAIN.../sites/system/app/pages/meta/dashboard/userSettings and select their timezone
https://sites.google.com/site/sites/system/app/pages/meta/dashboard/userSettings and select their timezoneto
Another workaround is descibed here