Your code is almost working, you only need to change three words to fix it properly.

$form->param( 'calendar' => $calendar );  # change row to calendar
[download]

In HTML template:

<tmpl_loop name="calendar">   <!-- change row to calendar -->
<tr>
  <tmpl_loop name="row">      <!-- change day to row -->
    <td .... ><font ...><tmpl_var name="day"></font></td>
  </tmpl_loop>
</tr>
</tmpl_loop>
[download]