Well I think I found the solution...
After I left it at the blue desktop I was greeted with a prompt that said:
During the previous startup Knotify crashed while instantiating Knotify. Do you want to try again or disable aRts sound output?
I clicked on "Try Again" and was still left at the blue desktop.
I rebooted, reinstalled and chose disable auto login. I was now able to chose between KDE and GNOME at startup. Instead of KDE, I chose to boot up Gnome window manager and now it works perfectly; no more stall at startup on the desktop.