I just pushed the MIPS/ARM disassembler for the ARM recompiler (ported from psx4all). You may now see exactly how the MIPS code is being translated to ARM code.
Unfortunately the recompiling processor still crashes, but that got me closer to pointing where. Now I know that the recompiler is working fine, but there is something wrong on the stitches to C code.

If you do not know what the hell is recompiler, M.I.K.e7 had written excellent article on dynarecs here: http://forums.ngemu.com/web-developm...roduction.html