I had the same problem once, the problem was this:
I had been installing some tar file, and somehow the permission on /
was:
drwx------
it should have been
drwxr-xr-x
Try doing a 'chmod 755 /' as root.
That had also happened to me once. I'll certainly check this, but I
don't think it's the problem, since it's solely a matter of which
kernel I boot (1.3.86 vs. 1.3.87 or .88) with no other differences.