A very odd problem, with an even odder work-around

The main problem I have is that my system hangs when booting the 2.6.10 kernel with SimplyMEPIS 3.3 from either the CD or the hard drive. It gives the message Somethingoranother initialized (#########), then the cursor switches to the next line blinks 4 or 5 times and goes solid. The computer will no longer respond and has to be hard rebooted. The system hangs like this from reboot via button or command, and from a cold start.

However . . . if I select to run a memtest from GRUB (which if allowed to finish finds no errors whatsoever) and immmediately or at any time during the test hit ESC to reboot - and THEN boot the 2.6 kernel, the system boots fine. This happens from CD and from HD boot. I can boot the 2.4.29 kernel from either image at any time with no problems, and without the MEMTEST work around.

This problem has my puzzler stumped. I've never seen anything like this - and I've been a Linux/GNU user for a while. I was wondering if anyone has some insight for me. I would like to run the 2.6 kernel since I have fairly new hardware, and because I use quite a bit of higher end software to take advantage of the kernel functions.

Thanks in advance for your help and ponderment. My hardware config is below.

MtD - Mich the Drizzard

Machine specs:
CPU: Intel P4 3.0 GHz 800 MHz FSB w/ HT
RAM: 1GB dual channel DDR 400 MHz
VIDEO: ATi Radeon 9800 pro 128 MB DDR RAM - running fglrx 8.10.19
SOUND: Integrated Intel
MOTHERBOARD: Abit IC-7G - Intel 875P chipset
KB/MOUSE: both PS/2 via KVM switch

MEPIS is the only OS on the machine at the moment, with 2 primary partitions '/' and '/home' kept on separate (ample) partitions on 1 disk.