I am setting up an external USB hard drive to test.
Back later.
Edit:
OK. Just tested on a newly setup external USB hard drive.
with mircocore.gz, Xlibs.core.tczl, Xprogs.core.tczl, Xvesa.tcz, flwm.tcz, wbar.tcz, and an empty mydata.tgz all in a tce/ folder.
Test 1 boot options: waitusb=5 tce=sda1
Results: Booted normally into flwm X desktop with everything working.
Test 2: Same boot codes except added "text" option
Booted normally to $ prompt
At prompt entering startx
flwm X desktop started normally.
Everything appears to be operating as excepted.
With my production system working, a newly setup base system working, and meo's report of success, I don't see a problem.
Can you manuallt mount all .core. elements and minimal exteions, i.e, window manager, & wbar?