Looks like bigger troubles
> kernel panic: No init found Try passing init= option to kernel
Basically what the kernel is saying is that "I'm all loaded now, but I can't find what to do next!" -- init is usually the next program that is run -- it is responsible for deciding what to do based on the system's current runlevel -- i.e. start up in single-user mode (runlevel 1), normal multi-user mode (runlevel 3), start up X (runlevel 4 or 5) and so on.
Since your rescue disk seems to have no trouble, I am suspecting that there is something incorrect with your linux loader (usually LILO or GRUB), or that your /etc/inittab (the file that init looks to to see what to do) is bad/missing.
I don't run RedHat myself so I'm not sure how much more help I can be -- Slackware's boot process is far simpler than RedHat's. Perhaps it is time to call RedHat support? I'm positive that this can be fixed without reinstalling.
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