Kernel Panic After Time Machine Restore

I have an 17 in. iMac intel Core Duo. Hard drive died. Bought a hard drive. Installed it. Everything going fine. Booted up from Leopard DVD...did the restore from backed up Time Machine external hard drive. Took a couple of hours. It said to restart the computer. I did and got the terrible Kernel Panic that begins with "You need to restart your computer" and also has the message in other languages.

I've tried everything I know to restart from the DVD and nothing doing. Not working to hold down command and restart, X and restart, S and restart, etc. Anybody know where I should go from here. I've also done the restarts without anything else plugged in. I'm dying here.
Thanks!

Did you first run Disk Utility when you were at the OSX installer? Did you partition the new hard drive and select GUID Partition from the Options menu?

With the OSX DVD in the drive, right after the startup sound, hold down C and keep it down till the OSX installer starts to boot. If you can't get it to boot holding down C, hold OPTION down right after the Startup Sound. Keep it down till the menu comes up with the boot options.

Thanks for the reply.

I ran disk utility but I only erased the drive and formatted it mac os extended (journaled).

None of the holding down c options work. Any ideas?

Also, holding down OPTION doesn't work, still just pulls up kernel.

Update

Just a quick update for anybody who may come along with this problem.

I fixed it by removing the internal hard drive and making it into an external drive. I put my old internal back in, booted from disk, and wiped the new internal that I made into the external. Partitioned it correctly and reinstalled as the new internal. Working like a dream so far.

For those interested I installed the Seagate Barracuda 1 TB.