Before you do that. I want to make sure what you did, you said:
reinstalled Classic Startup off the original install CD and then from the Combo update.
Just to be absolutely clear on this.
In Part I, step 9, you press the 'Replace' when prompted by Pacifist. You want to replace the bad version on hard drive with a fresh copy from you CDs.
But in Part III, step 11, you press the 'Update' button when prompted by Pacifist. At that point you want to update the (freshly installed copy from the CD) with the help of the Combo Update.
Are you sure you pressed the right buttons? If you're not, then I'd suggest doing it again.
If you are sure you pressed the right buttons, then do some basic troubleshooting.
1. Open Disk Utility. Under the 'File' menu, select 'Fix OS 9 Permissions'. This will make sure the permissions are correct on your OS 9.x System Folder. (This isn't normally checked by 'Fix Permissions' of Disk Utility.) Try launching Classic again.
2. In the Classic System Preferences, Advanced tab, rebuild the Classic desktop. Try Classic again.
3. Trash the Classic preference in:
/Users/<username>/Library/Preferences/ByHost
You'll see a file like 'com.apple.Classic.xxx.plist' -- where I have 'xxx' you see a bunch more characters. Dump in the Trash.
Then launch the Classic System Preference to set the System Folder to be used for Classic. (You dumped the preference file, so this setting is lost.) Then try launching Classic again.