Grub thinks of boot as / to confuse newbies So when you have a leading '/' in grub, that directs it to where the grub files are, and your pathname has to be relative to /boot/grub.
Check this as follows: Run the following line in /boot/
ln -s ./ boot
That makes a symlink or pointer to boot/, and points it at the /boot directory. So if your box is looking for /boot/boot, it will find it :-D.
Then you get all proper if that works, and remove the /boot from your kernel and initrd
kernel /bzImage You also need ro root=/your/root/drive, e.g. /dev/sda5
Leave out the quiet, because you want it to give you debugging stuff.