Just a base install of OZ 3.5.3 opie 1.2, flashed fine, but wouldn't go passed the now booting message after sleeping for 60 seconds.
Perhaps you can detail how you flashed your new kernel, and then we can see if we did anything wrong.
Is there a special technique when you are upgrading the kernel, e.g. I didn't know that you could flash without the initrd.bin and therefore leave your current installation and modifications intact.
Of course I found this out after a complete fresh install !!!!
samac