The kernel panic issues from previous posts appears to be corrected with tazusb rootfs.gz, but tazpanel doesn't start AFTER a tazusb writefs operation. Tazpanel can be made to run again by two step stop/start of the service. However, '/etc/init.d/tazpanel restart' does not work.
Also, boot log shows an error starting the message bus daemon:
DBUS... Failed to start message bus: The pid file "/var/run/dbus/pid" exists, if the message bus is not running, remove this file
edit: I forgot to mention that this occurs with the latest bootscripts package pulled, and no other packages installed beyond core.