This Win7 error is seen a few seconds after the four glowing squares appear. It lasts for 15 seconds and you then see a brief BSOD followed by a restart.
DaleHolden recently experienced this issue when using Ghost. I saw it about 15 months ago and I wasn't using Ghost. I saw it again today after a Ghost Copy Drive. It occurred when I tried to boot back into the source partition. Dale and I were using Win7.
This boot error occurs in WinXP if you try to boot a hidden WinXP NTFS partition. If you try to boot a hidden Win7 NTFS partition it hangs on the four glowing squares.
Dale and I have searched Google and there is no solution for this error in Win7. Well none that we found and we did try hard.
Today I tried...
Checking that the partition wasn't hidden. It wasn't.
mountmgr.sys wasn't missing
Sliding the partition didn't help
Win7 repair didn't help
Getting desperate, so I tried tbosdt and found Win7 didn't have a drive letter. I assigned C: and Win7 booted.
In Win7 if you go into [MountedDevices] and rename
\DosDevices\C: to \DosDevices\
you will get "autochk program not found - skipping autocheck" on the next boot.
I think this is the cause of the error. An absent drive letter for the Win7 partition.