The bootdisks are now based on kernel 2.2.12 but some modules are based on 2.2.5, thus when I tried to install using the new images, it reached up to the LILO configuration and was trying to insert the module "loop.o" and the LILO configurator was giving an error. I tried to insert the module manually, and it gave me an error on the kernel version.
*** This bug has been marked as a duplicate of 5252 ***