I have experienced the strange bahaviour of the OpenWRT on my WL500gP v2.
After reflashing I've switched it on, but then I decided to reboot it.
It didn't start up any more, displaying the kernel panic message.
Fortunately, I was able to reflash it once again.

I've stated, that a few second after the console may be used, the OpenWRT displays the
messages:

jffs2_scan_eraseblock(): End of filesystem marker found at 0x0                  
jffs2_build_filesystem(): unlocking the mtd device...

If someone reboots the box before the following messages appear, the described problem
occures...

done.                     
jffs2_build_filesystem(): erasing all blocks after the end marker... done.      
mini_fo: using base directory: /                                                
mini_fo: using storage directory: /jffs

Probably kernel tries to mount the not completely built jffs2 filesystem, which
causes the kernel panic.