I saw the symbolic links for xen-4.0, and xen.gz pointed on xen-4.0.0.gz or xen-4.0.gz,
So that indicates you were booting into xen 4 with xen utils 4. It is unlikely that xen-tools would interfere so early in the boot process.
It's hard to pinpoint with such limited info. You can try a few things;
-- make a few entries in the grub, no need for just one.
e.g. my list has
title genny 2.6.26-gentoo fbsplash-Morphix (on /dev/sda6)
root (hd1,5)
kernel /boot/kernel-2.6.26-gentoo ro real_root=/dev/sda6 video=uvesafb:mtrr:3,ywrap,1024x768-24@60 splash=verbose,theme:Morphix console=tty1
initrd /boot/fbsplash-Morphix-1024x768
title genny 2.6.30-gentoo fbsplash-livecd-2007.0 (on /dev/sda6)
root (hd1,5)
kernel /boot/kernel-2.6.30-gentoo-r8 ro real_real_root=/dev/sda6 video=uvesafb:mtrr:3,ywrap,1024x768-24@60 splash=verbose,theme:livecd-2007.0 console=tty1
initrd /boot/fbsplash-livecd-2007.0-1024x768
It's an old redundant entry. But no need to limit yourself to one version in one state.
Re -emerge xen 4, but adjust your entries, leave links to xen.gz, hard code it
kernel /boot/xen-3.4.2.gz
kernel /boot/xen-4.0.gz
No reason why the two can't co-exist. i.e. ls /boot/
xen-3.4.2.gz
xen-4.0.gz
So the way you did it, at boot, you had only
kernel /boot/xen-4.0.gz
Don't see why you couldn't have the choices at boot of alternate entries into gentoo. By rights, one version should be able to boot into another, ???
Gentoo's xen 4 may be at fault. A previous version missed building key elements, but booted up ok,
If version 4. misfires, have the backup of the reliable 3.4 Just maybe a remnant file or two of 3.4 interfered with xen 4, just maybe.
Try with an initrd, but it shouldn't be required to boot dom0.
As I said, consider installing from xen source and it can compare and contrast. xen is after all quite complex and sometimes delicate.
the fstab entry is something I came across. Just try it, it coincides with your problem.
In time I can try version 4, maybe soon.