I ran through the whole operation again, started with a fresh format on the mmc (decided I wanted more than 15000 blocks for a fat system). I ran the majority of the walk through from a remote ssh session in order to avoid potential typos that I could have made as well as prevent any xterm crashes. The whole thing went very smoothly, and it is now booting properly from mmc2. Any big mods like this and I'm going through putty again, its deffinatly the way to go.

I appreciate everyones help with this, hopefully I won't be back asking questions again anytime soon.