Uh, oh.
Sorry for missing this thread previously. (It's in the wrong forum category. Could one of the moderators please move it?)
Getting back to the issue at hand, the answer seems simple to me: don't use "small". You're not ready for it.
The "small" option, which loads the smallird.gz ramdisk image does not contain a bootable AmigaOS partition in RAM as the bigird.gz image does, and since you haven't had a chance to set up a hard disk AmigaOS bootable partition either, the kickstart is just trying to display the old "insert boot disk" screen. However, as this screen is usually displayed on an AGA chipset display which is not emulated by Amithlon, you are getting a corrupted screen.
You need to locate the script that uses bigird.gz instead of smallird.gz, and use that with loadlin. I think it's just called "amithlon". Don't foget to use the "dovesa" bit as well.
