10.6.8 + moved Home Folder = problem?

I've got a 2008 MacPro with 4 hard drives. When I installed the extra drives, I moved my Home Folder off the boot drive and onto one of the spare drives using Accounts preference->Advanced options. This has worked like a champ for several years (10.5 & 10.6).

When I did the upgrade to 10.6.8 from 10.6.7, the boot process now hangs on the grey Apple POST screen. I've tried single user mode plus resetting the PRAM and nothing works. I had to revert to 10.6.7 to get it boot.

Here's what I did to troubleshoot:

Downloaded and ran Combo update

I've run Disk Utility and the drive shows no issues.

Ran Disk permissions.

Tried booting in Single User mode

Tried booting in safe mode

Tried booting in Verbose mode

None would get past the POST screen.

Plus: Installed 10.6 on a spare drive and updated to 10.6.8 and have no issues as long as I keep the Home Folder on the boot drive.

Here's how I got my system back but not running 10.6.8

Re-installed 10.6 and did combo update to 10.6.7 then reset my user account to point to old home folder. System works just like prior to 10.6.8.

Anyone else have this issue?