I have the same problem after upgrading Vmware ESXi 4.0 to ESXi4.1.
I've found another work around that works for me:
In the vSphere manager, shutdown the virtual machine and edit it settings: go to the Options tab, and select "CPU/MMU Virtualization". There, change the selected option from "Automatic" (the first) to "Use Intel VT-x/AMD-V for instruction set virtualization and software for MMU virtualization" (the third).
I have the same problem after upgrading Vmware ESXi 4.0 to ESXi4.1.
I've found another work around that works for me:
In the vSphere manager, shutdown the virtual machine and edit it settings: go to the Options tab, and select "CPU/MMU Virtualization". There, change the selected option from "Automatic" (the first) to "Use Intel VT-x/AMD-V for instruction set virtualization and software for MMU virtualization" (the third).
After that, I can boot with any 2.6.32-3x kernel.