mj41374, try updating with these files:
kernal:
http://balsat.hopto.org/download.php...inuxMSM.tar.gz
rootfs:
http://xdandroid.southcape.org/rootf...12-92b6e96.zip
these are a little more up to date than what you have. delete your current zimage and modules and rootfs. make sure you rename the new rootfs to rootfs.img.
use the startup.txt you posted above. shouldn't have an issue booting then.