Here try this one on for size.
boot off the windows xp cd and go into the recovery console, this is not the F2 ASR at the begining.
when inside of recovery cnosole go to the folder and rename the system and software files.
now go to the %systemroot%repair folder and copy the system and software files into the %systemroot%system32config folder.
then exit out of recovery console
This is what we call swapping our the system and software registry hives. if the problem is registry based then this will fix it. but there is a side affect to this. you will loss all you software and you drivers for a little while.
OK if the system boots up now go into the system restore. start > accesories > system tools > system restore. and restore to a point in time that is before this started to happen.
this is the fastest way i know of getting the system back up and working properly.
and PS, the flashing blue screen can be prevented in the future by right clicking on my computer > advanced > start up and recovery > uncheck the auto reboot and set the crash dump to complete.
if that doesn\'t do it message me or post again.