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In the "depmod" section several command outputs assigned to variables are missing backtics: mtag=grep -l "$ktag" /lib/modules/*/.rhkmvtag 2> /dev/null and mver=echo $mtag | sed -e 's,/lib/modules/,,' -e 's,/.rhkmvtag,,' -e 's,[ ].*$,,' This prevents the values from being assigned to the variables.
This has been fixed in later versions of initscripts. Try the initscripts package from Raw Hide.