use the disc2 as rescue disc to boot. (this, at least, does boot, doesn't it?)
then, as root, type
chmod a-x /etc/rc.d/rc.hotplug
this will disable hotplug. the next step towards perfection would be to switch to a 2.6 kernel and try to re-enable hotplug.
in case even the rescue disc doesn't boot, try passing the "nousb" boot option. this is the boot option you're looking for.
in case even that doesn't work, turn off all usb ports in your bios setup configuration. or use another linux livecd as rescue disc, like knoppix.