OMFG I am such a noob
I got the system to boot up fine following your directions, I added ext3 to /etc/mkinitrd/modules. I had noticed from one of your earlier posts that the initrd line was missing from /boot/grub/menu.lst for Debian GNU/Linux, kernel 2.6.16 Default. So what i was doing was adding initrd /boot/initrd.img-2.6.16 to that section for Default and Default (Recovery). Then I just now noticed that /boot/initrd.img-2.6.16 was already on Debian GNU/Linux, kernel 2.6.16 a little bit farther down in the file. The difference between the 2 is that the second is not (Default), and they are listed the same way in the boot menu. So i left the initrd line out of the (Default) section, selected that at boot up menu and it loaded up great, version 2.6.16 So I guess I was pointing grub to a different kernel image then i should have?