Don't know if this should be on a separate thread or not, but I'm getting a similar error when installing MDK 8.1 on a second hard drive.
hda is Win2k Pro, mandrake is installed on hdb1. Mdk runs fine, I just have to boot from a diskette. I tried installing lilo on MBR, but just as lilo starts to kick in I get 070707070707070707 written to the screen and I have to manually restart.
After reformatting MBR for windows, I installed lilo to hdb1 and used the windows bootloader. Now, on boot, the windows bootloader comes up and Win2K boots fine. But, if I choose Mandrake, I'm greeted with the 070707070707 again.