I found a workaround. I exited /etc/default/knoppix and changed "SYSTEM_TYPE=debian" to "SYSTEM_TYPE=beginner" and the hang went away. The only side-effect is a slower boot, which I'm willing to tolerate. Last night when I tried this my wireless card acquired an IP address without intervention. This morning I had to manually run 'sduo pump -i eth0'. This is a slight annoyance compared to a boot hang and likely something I can work around as well.