I'd say software, as long as it boots fine from the Rom disk, and you're internal drive mounts in the Finder. But it's just me.

Have you tried to simply boot with extensions off (Caps at atartup)? If it boots, you could then begin to troubleshoot your System the old-fasioned way, removing all extensions from the Extensions Folder (System 7) or the System Suitcase (System 6) and putting them back one by one until you find the culprit.