It does sound like a hardware issue due to the fact you are still getting 
panics from the dvd, ram is the most likely cause but there are many things 
that could cause it.
Fortunately ram is well priced these days if that is the issue..

Your always welcome to bring it down to us to diagnose if you get stuck
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On 10/08/2010, at 12:28 PM, Andrew Schox wrote:

> 
> Thanks guys. I don't have any peripherals connected. I'll have a fiddle with 
> the RAM and boot in diagnostic mode.
> 
> Unfortunately it is out of warranty :-(
> 
> Andrew
> 
> On 10/08/2010, at 12:16 PM, Rob Phillips wrote:
> 
>> 
>> And you could try booting up off the Installation DVD in diagnostic mode.  
>> Hold down D as the DVD starts up.  I've never had this test find anything, 
>> but maybe that was because I didn't have hardware problems!
>> 
>> 
>> Rob
>> 
>> On 10/08/10 11:45 AM, Andrew McColl wrote:
>>> 
>>> Yep.
>>> 
>>> If you're seeing Kernal Panics when you try and boot off DVD and after 
>>> you've reinstalled the Operating System then its fairly likely that its 
>>> Hardware.  Might be faulty RAM or possibly a failing Logic Board.  If its 
>>> still under warranty fire it in to an Authorised Apple Hardware Tech and 
>>> they can diagnose it for you pretty quickly.
>>> 
>>> If you want to play with this more yourself you could try reseating the RAM 
>>> or removing one stick and seeing if the problem goes away.  If it doesn't 
>>> replace and try removing the other.
>>> 
>>> Good luck.
>>> 
>>> Andrew
>>> 
>>> Quoting "Andrew Schox" <and...@perthfootankle.com.au>:
>>> 
>>>> 
>>>> Hi all,
>>>> 
>>>> I have an Intel Mac mini which suddenly started having kernel panics (even 
>>>> when trying to boot from a DVD). I managed to erase the hard disk, 
>>>> reinstall the OS, and download all the software updates. All was fine for 
>>>> almost two days, but now I am back to the kernel panics again.
>>>> 
>>>> Does this sound like a hardware problem?
>>>> 
>>>> Cheers,
>>>> 
>>>> Andrew
>>>> 
>>>> 
>>>> 
>>>> -- The WA Macintosh User Group Mailing List --
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>>> 
>>> 
>>> 
>>> -- 
>>> Andrew McColl
>>> ski...@ucc.gu.uwa.edu.au
>>> 
>>> 
>>> 
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>>> 
>> 
>> -- 
>> Associate Professor Rob Phillips
>> Educational Development Unit
>> Room 4.42 Level 4 Library North Wing, Murdoch University
>> r.phill...@murdoch.edu.au Phone: +61 8 9360 6054 Mobile: 0416 065 054
>> Fellow, Higher Education Research and Development Society of Australasia
>> 
>> 
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> 
> 
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