then run BuildLevel or CreateLvz on the .ini file. This will create the .lvz file. Upload the lvz file to the server (possibly using *putfile) then finally make sure your .cfg file has misc:levelfiles=myships.lvz
If you want to just edit one ship, Make the ship facing directly upwards, and rotate it using a program such as EZ Image Rotator to have 4 rows and 10 columms. Then save the file as ship1.bmp for warbird, ship2.bmp for javelin, ship3.bmp for spider ect. Finally change your ini file to use ship1.bmp instead of ships.bmp and run CreateLvz on the ini file.
Might as well go for all three: If you ever decide to make other (non-ship) lvz images on your map, you can use Continuum Level / Ini Tool to do that so you won't have to edit your .ini file by hand or deal with creating the lvz.