Is your root FS built into the kernel.
Had the same problem with 2.6.8.
Adding initrd.img-2.6.8 to menu.lst didn't help, just leaded to the next error:
/dev/console not found.
I think that the solution to my problem was - compiling the root filesystem (where / is mounted, for me it was ext3) support in the kernel. I am not 100% sure, because I changed kernel .config quite alot, but I think that this was the main problem.
P.S. Maybe I'm wrong. but then again.. maybe im not.
Hope this helps someone.