Just tried that and I got further too. I removed everything except hard disk and memory from the VMWare machine config, and in the VMWare BIOS setup (F2 on boot) I disabled the floppy drive, serial ports, and parallel port to minimize device issues.
So to everyone that got the panics try to use -f and -v
and see how far you get on that load and post results.
Upon starting with "-f -v" I got a TON (several pages) of "Loading HFS+ file: xxxxx" messages, then the graphics mode changed and some more stuff happened, with processing terminating with the error shown in the attached pic.
Not sure if this is progress...