Originally posted by Nimoy
In rescue mode have you changed the system root yet... like the boot splash screen suggested - I'm not sure but this might be the reason that the mkbootdisk command can't find the location of your boot which is found in the etc/fstab file
heh,.. the whole time the solution was right in front of my face.
chroot /mnt/sysimage <enter>
mkbootdisk 2.4.20-8 <enter>