Moving Win2k installation > system.sav error

[Rebus]

I'm moving a Win2kSP4 installation to new hardware per MS KB article 249694. Both machines are modern and use the same HAL, etc. I get to the final step 8 to perform an in-place upgrade by running Winnt32.exe from the Win2kSP4 CD. After reboot during this "upgrade", as Windows is starting it reports that System.sav is missing or corrupt and fails to boot. Two attempts to migrate have resulted in the same issue (repeatable). The file is not missing. Performing a fast repair from CD does not correct it. Booting to last good known configuration results in the same error. Replacing the System.sav file with System.alt or System.bak via the recovery console still results in the same error message. Ideas?