Ok, so now we know that this problem is OSX specific and has nothing to do with the physical NIC card. The only explanation that I can give to this problem is the following, maybe some kernel extension is being loaded which screws up the networking stack. Go into /System/Library/Extensions and take a good look at it. See if you see anything related to PithHelmet or Gimp-Print. As well take a look in /System/Library/StartupItems, and make sure there is nothing related to those two programs there either. If so, bring those folders or files down to the desktop, and reboot. In order to better assess search within the startup items, go into the terminal and type the following:
%cd /System/Library/StartupItems
%grep -r gimp .
%grep -r pith .
%grep -r helmet .

If any of these grep commands return anything, they will give you a path to the file where the either one of those words were found, if at all. If any file shows up, move the folder which contains that file to the desktop. Let me know what you get.
AtomicTuesday

why you picking on gimp and pithhelmet?

i don't see this as a good approach.

we have no indication that the issue is with either of those, so just whacking at the weeds isn't going to learn us anything, and may cause new issues.

atomictuesday:

Nope, there are no Gimp-print or Pith-Helmet realted files in /StartUpItems/ or /Extensions/ (well, nothing obvious).

.......... Tom

I mentioned those two programs because Tom said the problem first started when he was installing these programs. The problem cannot be with the kernel unless a kext somewhere is acting up. Tom, do this, logout for a moment, and in the username enter ">console", then login in again at the prompt. Now that we are out of window manager do, "%ifconfig -a". As well, just to check the connection, try to access a web page. Do "%curl http://www.apple.com". A bunch of html data should come up if you are connected. Also, try to run tcpdump once again after disconnecting the cable, just to see what packets show up. Copy the information to the post only if you see something related to bootp. I'm sorry but we are running out of options here.
AtomicTuesday

atomictuesday:

Doing as you suggest and running ifconig -a gives the same warning as we saw before:

"WARNING: No IPv4 address"

Running curl gives a message that basically, it can't find the internet.

Running tcpdump gives a LOT more datapackets, but no mention of bootp. Mostly I get lines similar to:

"
192.168.123.7.54600 > 237.255.255.253.svrloc: udp 49"
... and a chunk of data.

After stopping tcpdump, I get:

"25 packets received
0 lost
en0: promiscuous mode disabled"

Also: When pulling the cable, console gives the message:

"Ethernet (UniN): Link is down"

And when plugging the cable back in:

"Ethernet (UniN): Link is up at 100Mbps Full Duplex."



One thought: In watching the console log output, I noticed a number of error messages related to Timbuktu. Perhaps the Timbuktu Host, which is loaded early -- even before the login screen comes up -- is damaged.

So I removed Timbuktu -- no luck.

Another thought: Would evidence that the network driver is damaged include problems with the Sharing Prefs Panel. As I said, if I click Sharing the beach ball spins until I click System Prefences again in the bar, then clicking Sharing opens up the sharing window. When looking at the various sharing options, the info displayed on the righthand side of the window indicates that Web Sharing is not installed, FTP is not installed and printer sharing is not available. About half the time when highlighting one of those choices, System Preferences crashes, sending me to the Finder. Something is broken .....

-- Tom

As I previously stated, I think the answer may lie in a kernel extension acting up for some odd reason. We have timbuktu running in another computer with no apparent problems. Just to make sure timbuktu is not causing this, check the Extensions folder and see that nothing related to it is present there. Unless the networking driver is somehow damaged I don't know what else to suggest. If you have an external zip drive you may be able to transfer data to it. This of course is the last resort. Then would come the reinstallation of OSX. I honestly wouldn't give up, try speaking with someone experienced that can actually look and work with your computer. I wouldn't call Apple because I doubt their technicians will know anything about this. That's all I can offer.
AtomicTuesday

Final Resolution
 

OK, I've finally solved my problem (by re-installing OS X).

Since I was able to reboot into OS 9 and have a connection to my LAN, I backed up important files (1.3GB) to another Mac.

Then I used the Archive and Install option in the OS X 10.2 installer.

I checked the keep current settings and users box.

An hour later, on re-boot into OS X, everything was fine. I then went to Software Update and updated everthing (including OS X to 10.2.6).

I reinstalled GimpPrint and Timbuktu (I'm holding off on PithHelmet).

After rebooting (again) -- eveything is working perfectly.

Thanks for everyone's help.

--- Tom