This is what I had in my default ks template:

bootloader --location=mbr --append="nofb quiet splash=quiet --md5pass=<%= root_pass %>" 

This generates illegal kernel boot options that cause kernel panic during the boot.

The line should be:

bootloader --location=mbr --append="nofb quiet splash=quiet" --md5pass=<%= root_pass %>

Patch:

--- a/app/views/unattended/kickstart.rhtml
+++ b/app/views/unattended/kickstart.rhtml
@@ -8,9 +8,9 @@
 rootpw --iscrypted <%= root_pass %>
 firewall --service=ssh
 authconfig --useshadow --enablemd5
 timezone UTC
+bootloader --location=mbr --append="nofb quiet splash=quiet" --md5pass=<%= root_pass %>
-bootloader --location=mbr --append="nofb quiet splash=quiet --md5pass=<%= root_pass %>" 
 <% if @dynamic -%>
 %include /tmp/diskpart.cfg
 <% else -%>
 <%= @host.diskLayout %>