They had a workaround that was kind of strange:
"Originally Posted by schlongsalami
Ok here was my fix.. As strange as it sounds...
When I booted up my computer from the DVD.. I typed mediacheck, it would give me an error, I then typed linux mediacheck and everything worked find... I'm using FC4 now...
If I just typed linux mediacheck first I would get the same error 'kernel panic' ..
For some strange reason it only works if I type mediacheck first then linux media check...
I have installed FC4 twice this way... Hope others find this helpfull..."
I don't see how I could do this in the Sabayon installer though...
I'm using the 3.3 dvd. It runs great in live-mode but it fails install on this error no matter what I do.
The drive I'm trying to format too is dev/sdb2.
Very frustrating to say the least
-Garrett
