If it will reboot in safe mode, have you looked at your login items? Better yet, do you have a login ID setup with no login items, and if so does that work? In addition to no login items, when you look at system preferences, do you have any programs listed at the bottom of the pane? Typically, if a safe start works, and the disk and permissions don't need repair, the next place to check are login items, which a safe start doesn't load.
Although this sounds like a software, not hardware issue, I would run the extended Apple hardware test. Insert the original OS X DVD that says 'AHT Version x.x' in small print on the DVD, and reboot holding the alt/option key down. Choose the Apple hardware test and when prompted, choose the extended test.
If you have any external devices connected, disconnect them. KPs are usually caused by RAM or USB/Firewire connected devices. How many RAM modules are installed?
I don't think this will solve the problem, but it's easy to try. Reset the PMU http://support.apple.com/kb/HT1431
May be a solution on one of these links.
http://www.thexlab.com/faqs/kernelpanics.html Resolving Kernel Panics
http://www.macfixit.com/article.php?story=20060911080447777 Avoiding and eliminating Kernel panics
http://macosg.com/group/viewtopic.php?t=800 12-Step Program to Isolate Freezes and/or Kernel Panics
I too am having the exact same issue w/ a Powerbook G4. I'm new to Apple products & have used this machine as an attempt to try out a Mac. The Kernel Panic started in the middle of being on a web page & has not rebooted since using several keystroke combinations I've found while searching the web on this topic. I've swapped out ram chips etc. that doesn't seem to be the problem. There are no external drives or peripherals attached. Can someone tell me what the keystroke commands are to boot from an OSX disk? The DVD drive still works & I have no problem re-installing the operating system. At this point I can't get it to boot in any mode to see if there is any sort of hardware issue.
thanks in advance