The PXE-E32 timeout error has many reasons, probably !!!
The following were my findings in regards to the "PXE-E32" problem.
I'll note my setup in case it might help others ...
Server side was
dhcpd on Fedora Core 7 (seven) x86_64
The
dhcpd.conf had the next-server directive which was pointing to another machine running
dnsmasq as the TFTP server.
* The above setup works flawlessly if I use an Intel LAN card.
* The same setup
DOES NOT work with the onboard (crappy?) RTL8139 card.
* IF I move the TFTP supplied files on the same machine as the one running my
dhcpd, then the same RTL8139 cards netboots OK (!) ... sometimes !!!

* If I use the gPXE ISO for my LAN card, the "dhcpd and tftp separate" setup works OK ... all the time.
From the above I have concluded (at least for myself

) that the LAN card PXE loader IS at fault. ( I guess the TFTP client part, but not sure)
If I
really need to PXE boot from my RTL8139 LAN card, I'm going to use the gPXE ISO.
For now, I have disabled my onboard LAN and fit an Intel LAN card, and life is happier!!!
Regards,
Shantanu