[dnanian]

When you indicate that you're booting from the external, is the external a Sandbox or a full backup? If a Sandbox, you can't unmount the internal, because lots of things are shared.

Here's what I'd do at this point: get some drive you can boot from, not your backup, and install OSX on it, straight up. Then, use that to try to repair. The problem, of course, is that if your system is panicking when you simply start up from the DVD, there's no way to install anything... so, disconnect ALL peripherals and remove any 3rd party memory before the attempt.

You really need to be able to boot from the DVD without crashing, Chris... if you can't, I think it's likely you'll need to visit your local Apple Genius and/or get the Mac serviced.