When going to boot Debian on my Peg2 I get the following error message upon booting (then it freezes there)
Modprobe: FATAL Could not open /lib/modules/2.6.6-powerpc/kernel/fs/ext2/ext2.ko : no such file or directory..
It might help if you have that file on your disk. The best kernels to use are the 2.6.8 or higher ones - anything less is less mature for Pegasos and may not be fully functional. You can get them DIRECTLY from Debian apt respositories (the powerpc kernel works). There is a quirk involving "mkvmlinuz" which I will let someone else explain...