Can't boot XP after upgrading to RC2 from RC1

Soon after the Windows XP logo comes on with the blue progress bar, I'm getting a blue screen that says:

STOP: c000021a {Fatal System Error}

The session manager Initialization System process terminated unexpectedly with a status of ...

The message only comes up very quickly so I can't read it all, and each time it shows a different percentage of the full message, as if it is crashing before displaying the entire error message to the screen.

This is so annoying when I have a perfectly working system that suddenly dies when I try to upgrade. Is there anything I can do to get back into my system? I tried booting in safe mode but that didn't work.

Thanks,
Carl

 

Solved

Weird solution to the problem: I cloned my existing VM and it now boots successfully.

 

I think creating new VM configuration and attaching old HDD to it also will help.