It maybe won't fix the issue - but why are you using an obsolete Release Candidate? 1.2-RELEASE is available on the mirrors. There is one reason I can think of to start with RC3, which is if you have a system that won't boot with the uniprocessor kernel in 1.2-RC4 or 1.2-RELEASE, but you can still install 1.2-RC3 then upgrade to 1.2-RELEASE with the SMP kernel selected in that case.
It would certainly make sense to clear the configuration and start again. If that doesn't work, and the box is still responding to the console, select bridging again then reboot. Does it work then?