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Configuration register is 0x2101
Ah, as mentioned in my prior posting, the ending "01" tells the router . . .
Boots Field Parameters:
0x0000 - Stays at the system bootstrap prompt.
0x0001 - Boots the first system image in onboard Flash memory (EPROM).
0x0002-0x000F- Specifies a default netboot filename. Enables boot system commands that override the default netboot filename.
That's why your newer is image is being ignored.
If you change the last two digits to "02", it will "try" to boot the newer IOS. However, I believe newer systems "know" RAM requirements, and as your router don't have enough RAM, it appears, you should see a log message that that image will be ignored and it will try to boot another, in your case, should be the other image. On older platforms, router would try to boot the "too large" image, which may, or may not work. If they did boot, little RAM was left for running RAM needs. (So, BTW, if you had removed the original image, you may have had a larger paperweight [until you reloaded a suitable IOS]. Again, as Rick also noted, it's best to truly identify issue before making changes.)