Ok, because I did not get any help to fix this I took matters in my own hand.
A complete CMOS reset (remove battery + jump the CLR CMOS) fixed the problem.
I am jsut writing this for future reference in case anybody else has this problem.
After the reset, I did go back into BIOS and the only change I made was for the IDE controller to be set to RAID. The RAID controller itself still had my previously setup RAID stored, so I did not have to do that again.
After that the system booted fine and I am in the process of installing Windows XP Pro (using F6 method).
What was really cool: I did not need a floppy drive for the driver. The utility from Intel installed the driver onto my USB thumb drive. I booted the ASUS board with the thumb drive plugged in and Windows F6 driver selection picked up the driver from the USB stick.