No, should not be an issue
At this point, without knowing what all went in your update, would use kernel-switcher to try and fix.
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kernel-switcher --help
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kernel-switcher list
you would see all the kernels available, would install all needed modules and update grub.
Updating kernel is a bit extreme for this issue, at same time it will update your kernel and all needed drivers. I suspect a driver issue here. We could play cat and mouse and try to guess which driver it is, chances are kernel-switcher will take care of it and in sabayon terms, 2.6.39 is quite old.... I would want to update the kernel.
That being said, 2.6.39 worked well, no reason for it not to work now.
At the login screen, alt ctrl f1 and log in as root.
equo update
equo install equo entropy
equo upgrade
equo conf update
Pay attention here, equo install equo entropy should install a couple packages, if you just upgraded, equo upgrade should install nothing unless it was broke, equo conf update if it ask for action from you .... may be all you need.
I suspect something as little as equo conf update, may be wrong.