Sorry if this is a stupid question, but I've seen such mistakes before....Are you sure you actually made a light object with ID "torch"?
The ID "torch" is an item all ready in the game and i didnt alter it, I added my fake torch and its called "Mf_torch_toggler" and it has a that script attached to it.
But like I said if I change that line to:
getitemcount, "torch_257"
player->equip, "torch_257"
it works.
EDIT: the origional script works fine if only the morrowind.esm is used to create the esp, and if the morrowind.esm is used in game. Once I create the .esp with MW.esm, BM.esm, and TRI.esm with the same script and load the game with the same masters it doesnt work, i get a error: script error expression , then another error: left eval. Something in bm or tri is messing something up, and this IS a fresh install with the patch.
Now I can work around this by changing the id of "torch" to "torchMF", but I don't know if that's a good idea or not.