Ok gents. I used disk utility to find that the disk was Ok. I had removed all anti-virus. still no go. I backed up hard drive and went to Apple store. The help came from Barry. He looked at my file structure and I had "decades ago" set up my personal document files at the Root level (at MAC HD logo. He found that in a couple of my files I had some old OS 9 applications and a spare system file. He/we deleted a lot of stuff and then moved my main Identity up one level.
I took the macbook home and backed up again. I then did the install using the earlier process of the countdown to 46 minutes and the technique of holding the "c" at the chime and releasing at the spinning gear. That kept the install going and completed to 10.6.3.
Two outcomes - now I can run TurboTax :-( and now the online upgrade to 10.6.8 keeps stopping midstream. I will deal with that after tax time.
Thanks for the many comments and help.