Kernel panics & grey debug screen at startup

Question

Tiger (10.4.10) on a 2 GHz Mac mini (Intel) and Airport as well as IPv6 disabled.
Not sure which torrent client I installed first but I think it was Transmission and everything was fine. Then I installed Azureus on the advise of a friend and started getting kernel panics. Switched back to Transmission and KPs continued. Soon I started getting them with just running Safari or even Firefox.
Next there was a Mac OS upgrade (10.4.11 and a couple other things) and the machine would not even start up anymore. Always got a grey debug screen with msg to press powerbutton.
Tried doing an archive and install and it failed twice.
Tried doing a clean install (OS only) on external 30GB USB 2.0 HD and it failed as well.
Apple Support and Apple store were clueless.
At least the genius was able to boot with their troubleshooting HD and run Disk Warrior which found a couple minor issues and I was able to see that my data was stull there. Unfortunately the 30gb HD was too small to copy my user folder (86gb).
Went and bought an external 320gb firewire disk and tried to do a clean install and it failed.
Called Apple again and suspected bad DVD media. They sent replacement disks and they failed as well.
Ran Apple Hardware Test and it found bad memory (?) with 2x 1GB Corsair sticks. I even tried them individually. That memory has worked since August 2007 until I started seeing the kernel panics in December. What are the odds of both SODIMMs going bad at the same time ? Could a bad app cause memory to go bad ? I doubt it.
with 2 GB Corsair memory: 4MEM/4/40000000:2c02fd60
Swapped original 2x 512 MB Apple sticks in and AHT found another error.
with 1 GB Apple memory: 4SNS/1/40000000:TAOP
From other forum posts I found that 4MEM usually indicates a memory or system board issue while 4SNS seems to indicate a sensor issue, but that could have been due to unplugged (termal?) cable in front of mini due to the need to swap memory in and out for testing.
What gives ?
I was however, able to install now on external FW disk and copy my user folder to it as well.
So this indicates a problem with 3rd party mem but there may be something else wrong with mini system board or Apple mem as well.
TX

Answer 1

::UPDATE::
Okay, I eventually got my iMac to start up successfully, without crashing after logging in. But I still thought there was something wrong so I booted from the Apple Hardware Test CD that came with my computer and I got yet ANOTHER Kernel Panic! Here is what it said:
Kernel Panic Message:
DEFAULT CATCH!, code=300 at %SRR0: 000352d4 %SRR1: 00003030
Apple PowerMac4,2 4.3.5f1 BootROM built on 03/16/02 at 21:45:18
Copyright 1994-2002 Apple Computer, Inc.
All Ri
DEFAULT CATCH!, code=300 at %SRR0: ff84750c %SSR1: 0000b030
ok
0>
DEFAULT CATCH!, code=300 at SSR0: ff84750c %SSR1:_
This message appeared soon after it began testing the memory. The result of the test were as follows:
Test Results:
Airport Passed
Logic Board Passed
Mass Storage Passed
Memory In Progress
Modem Device Found
Video RAM Has not been run yet
And now it is back to not booting up at all!
Does anyone have any suggestions based on the new kernel panic message?
Thank you for your help.
Message was edited by: rrm74001