Fedora 16 Kernel Panic on Boot

In order to not mix my work setup with my home machine, I have a VM I work from ie. connect to VPN, check email etc.  I happen to use a Fedora install inside VirtualBox as opposed to VMware, but that’s irrelevant here.  Anyway, upon a recent “yum update” which included a kernel update, I began to see the following error upon boot :

Kernel panic upon bootup

A quick reboot into the previous kernel (I didn’t even have to hold SHIFT to get GRUBs menu) suggested the kernel was at fault.

GRUB Menu - Choosing previous kernel

But upon closer examination of the kernel and ramdisk images in /boot suggested something else :

Listing of kernels and ramdisk images in /boot

Strange that the initrd was so small. Running file suggested a gzip archive, but the image was much too small. A quick search led me to dracut being responsible for building the initrd, but running dracut itself failed. I didn’t capture that error message, but a quick “yum reinstall dracut” and re-run of dracut correctly created an initrd.