Some of your boot options need to be left out. For example, leave out local=hda1. Unless you intentionally want to boot into text mode, leave out text.
Here is what I use:
title Tiny Core
root (hd0,0)
kernel /boot/bzImage quiet tce=sda1 home=sda1 opt=sda1 norestore max_loop=256
initrd /boot/tinycore.gz
The norestore option will prevent the backup from a previous session being loaded when you start the computer. If you want the backup to be loaded, leave out the norestore option.
I don't use backup. I make extensions for anything not saved in home or opt.