Boot with CD1, at the 'boot:' prompt, type in whatever it says just above it (about booting an install with the cd. something like "root=/dev/hda..." Change hda to whatever your external drive dev is.
After booting, please post the results of:
And what filesystem did you format the hdd with? Ext3? Reiserfs?
And what kernel did you install? bare.i? bareacpi.i? test26?