This means GRUB has successfully loaded your kernel and initrd. LVM seems to be OK, but it looks like your root filesystem cannot be found for some reason.
RHEL 4 used the driver disk images differently than the later RHEL releases. If you have another Linux system available, try loop-mounting the uncompressed driver image file:
mkdir -p /mnt/driverdisk mount -o loop,ro cpq_cciss-2.6.20-34.rhel4.i686.dd /mnt/driverdisk
Then burn all the files you find at /mnt/driverdisk to a CD, and try giving this CD to the installer/rescue mode as a driver disk.