I have a working ks.cfg file -- I tested using floppy. When I put ks.cfg file on a RH CDROM and try to use linux ks=cdrom:/ks.cfg (for example) The loader never drops into anaconda. The error message in tty console 4 is "Cannot find ext2 file system on loopdev(7,0)" Looking at the source code for the loader, the umount command is unchecked -- if it doesn't umount for some reason, then the loader would not be able to mount the ext2 ramdisk in the right location. (I think this is the problem, but I don't really have good means to test it.)
*** This bug has been marked as a duplicate of 22285 ***