Any clues what I did wrong?
Yes. You placed the kernel on an LVM (grub does not support LVM...at least not LVM2 IIRC) and then come to this list where grub and lilo users like me are subscribers. Don't complain about grub. grub gives you far more power than that piece of trash called lilo.
lilo will take on LVM but it is rather hard to tell it where the kernel image starts if you cannot boot up the Centos 5 kernel in the first place...
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