I've gotten this same problem with different hardware. Tried version 3.3 on:

white box, Athalon 1Ghz, Biostar, CDROM on hdc
Dell Optiplex GX240
IBM Thinkpad A21m (internal CDROM)

Tried disabling DMA, noscsi, and failsafe -- all produced the same error. Kernel starts but it seems to freeze trying to access the cloop file.

Also noticed cap lock and scroll lock lights blinking on the think pad (I thought they were on solid on the Dell and white box, but could be wrong.)

Thanks!

Ed