Chuck I found what is wrong with my installation and why I cannot get into the admin area. The modification is identical to your files but I found out that in the pp.inc file you have a check to see the script name adm-index.php or adm-menu.php and if they are not the send_header of the .threads is sent. If they are then it goes on normally to the admin area with its own header. For some reason on my server the SCRIPT_NAME is blank hence it never validates on the if statement.
Is there another way to find out the script name? My register_globals are off. (Windows box)
Thanks