Sorry, I misread your post and did not noticed the part about live cd.
I not quite understand what you are saying:
Could you, please list what boot options you are talking about(I only used 5.8 live cd so I am not sure what you mean).
So when your monitor starts too complain, you have a command line, right?(it should be a command line login screen)
For MC you mean the Midnight Commander?
Yeah, that's it.
If you can launch it, you should try what I wrote before.
I had problems launching X-window from 5.8 live cd on two boxes, probably b/c of some problem with nvidia video card. Both time I had working CLI.
After I installed normal VL version, everything went fine.