Hi
I am impressed how deep you have dived.
There is a line in grub.conf:
#(removed by Converter) kernel /memtest86+-1.65 ro root=/dev/VolGroup00/LogVol00 rhgb quiet
While fstab reads:
/dev/sdb1 / ext3 defaults,noatime 1 2
Is the source machine's root volume a logical one? If yes, and LVM has been preserved during conversion, I suppose this could cause such an effect.
Besides the new grub entry is:
title CentOS (2.6.18-128.7.1.el5)
root (hd0,0)
kernel /vmlinuz-2.6.18-128.7.1.el5 ro root=/dev/sdb1 rhgb quiet
initrd /initrd-2.6.18-128.7.1.el5.img
the 'root' should point to the /boot partition, probably /dev/sda1, which by the way is not present in fstab
Edit /etc/fstab while in rescue mode so that / gets mounted on the logical volume, and /boot to /dev/sda1, and run grub-install again.
HTH
Plamen