I had the same sort of sysinstall failures with an attempted
upgrade from 1.5.3...

I elected to "finish" the upgrade with another upgrade...
This seemed to work except at reboot it would hang.

Sooo.... I returned to my 1.5.3 install floppies and  "reinstalled"
a generic 1.5.3. laptop kernel and rebooted....

I downloaded 1.6 syssrc and built a generic laptop kernel
rebooted and .... same thing

During the autoconfiguration process I get random "hangs".
At first I thought it had something to do with the "last message"
displayed and so built several kernels with different things
turned off ....

I thought I had made some progress as the boot seemed to get 
to the drives and so I fiddled with turning DMA off on the drives

I then got a random hang... (around USB probing)
I went back to the kernel that had made it to the drives
and continued to get random hangs.

Sooo....
What I have is a 1.5.3 Generic_Laptop kernel that boots without 
incident...

What I would like is a look at the config file that built that kernel...

Hoping to get a clue :-)

Al