Macs "just work" - until they don't

Here's my weekend saga...sorry for the length, but any comments would be appreciated. I've been using/repairing PCs for 20+ years, but have only been using Macs since 2007 - I'm still learning some OS X nuances.

24" iMac (2.93 GHz C2D, 8GB RAM, 640GB HD, GT120 GPU) running 10.6.8 (since the update came out) - had the iMac since mid-2009 and it has never given any problems before.

Saturday morning - couple hours before a golf outing....I notice my uptime (via Geektools) was 27+ days. Decided to check software update - there was the latest security update and safari 5.1, so I figured I might as well install them since I figured it was time for a restart anyway.

The updates install, then the necessary restart...grey apple (no gear yet even) - bang! kernel panic. BSD module name: unknown. Never had a kernel panic before with this machine.

Quick web research as to next steps...Zap PRAM - no good (by no good I mean same KP), Repair permissions - no good, boot to safe mode - safe mode works fine - restart - no good, boot to SL DVD, repair boot disk (it says disk was fine), repair permissions again - no good, unplug all stuff (and power) and replace wireless KB and mouse with USB, plug all back in - no good.

OK...enough...I have TM set to back up early every morning. Let's just restore back to this morning before I did the software updates and be done with this. Boot off DVD, restore from this morning's backup - same panic! Go to golf outing and put it out of my mind for the rest of the day

Return to machine Sunday morning. Hmmm....haven't restarted in 28 days...maybe something I installed or tweaked in the last month is to blame. Restore to my TM backup that's 29 days old and restart. This time I get the gray apple and spinning gear (fingers crossed)....argh, kernel panic - this time BSD module name is DirectoryService. I try one more restart - spinning gear - KP - module this time is kextd. For the heck of it I restored a 34 day old TM backup - restart gave the same KP's

I know when I've met my match and decide to call Applecare. Tech is friendly, I walked him through everything I did so he didn't suggest the same things again. At this point my drive has a 34 day old backup on it. He wants me to disable all my startup/launch and start at login items to satisfy his checklist. Do that - restart - KP at DirectoryService.

Tech suggests SL version of Archive/Install and would sit there while I did it...I told him if I'm going to do that, I first want to restore my most current TM backup so, if it works, I don't have to migrate a month's worth of data back over. I get a case number, thank him, and hang up.

I do the TM restore to just before the software updates that started this saga, then install SL 10.6.0 off the DVD. To my amazement, when the machine restarts, no KP, and things seem to be working fine, except I'm at 10.6.0. OK....now to install the 10.6.8 combo update. Install it, restart, BAM (no gear) - KP! 10.6.8 used to work on this machine until yesterday!!!

So, I re-installed 10.6.0 off DVD (again) and downloaded the 10.6.7 combo updater.  I installed the update, did some incantations, and YAY! - 10.6.7 seems to be working well at this point.  Do I dare attempt 10.6.8 again - or just wait until I'm ready to install Lion???