i'm using with miuiv4. in fact, for custom rom based on stock ics, i only use miuiv4.
miui just needed small modification in init.rc in ramdisk,
Code:service shelld /system/xbin/shelld class main user root group root oneshot
which i already added.
Couldn't solve the issue yesterday, however, today found the cause of the issue. There were some init.d scripts present in the miuiv4 build that caused the problem. I couldn't figure out which scripts are causing the issue... The build was booting fine with other stock based kernels (rage, ka1.6). So I removed all those scripts from the build and added only the ones I need most (zipalign..sysctl etc) and the build booted fine tonight
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