No kernel modules found
 

One upgrade to 2.6.16.16 went wrong
I made a typo in the mkinitrd with 2,6.16.16 instead of 2.6.16.16

Now the kernel panics on startup as it cannot preload reiserfs.

The /lib/modules/2.6.16.16 directory looks right, but I also made the possible mistake of upgrading alsa before the kernel-modules package

The mkinitrd program made a warning about being unable to find the modules when I was updating

I mounted the drive in another pc and copied a valid initrd.gz over but still no go.

Solved painfully by:
Mounting drive on another PC and putting symlinks in to 2.4.32 vmlinuz and Sysmap.
Put drive back and boot with Slackware 9.1 disk 2, selecting
bare.i on the /dev/hda1 partition
edit lilo.conf to drop initrd.gz line and run lilo
reboot from disk
Remove 2.6.16.16 packages, clean out directories and start again

My conclusion is that initrd together with generic kernel is dangerous, without a 2.4 bare.i kernel with reiserfs support compiled in on the /boot partition I would have been in real trouble.

I'm not sure this is relevant but did you rerun lilo after updating the inird?

I did and made things worse. It was only by using the old 2.4.22 kernel rescue disk I was able to even boot the PC