check and compare
I am a newbie. In fact total newbie, though I have done several installs of Linux systems and tonight i finally recompiled, installed and booted to the latest kernel-126.96.36.199.
I noticed this in your config:
default.xbe /E/Knoppix/default.xbe (taken from a previously installed version of XDSL)
linuxboot.cfg /E/Knoppix/linuxboot.cfg (taken from a previously installed version of XDSL)
root fs E/Knx_fs
E// instead of E/ and does it need E:/