try it w/out the kb/mouse attached, i would as u can easily access the web interface on 192.168.0.75 w/ l/p:admin/zeroshell. it could be the drive is too big as this person had, but that wouldnt explain the usb hang i would also try an ide drive.
http://www.zeroshell.net/eng/forum/viewtopic.php?t=1758&highlight=sata
i have not tried w/ a sata as of yet, lack of funds for experimentation but you may be able to upgrade your kernal to support sata. i have no exp w/ that others here are more knowledgeable on that front.
GL on this, i hope you get a satisfactory response soon.
JC
edit: a thought occurs, you may also try setting the sata to ide compatable in the bios.