I've read a few topics on this site about trouble open classic within OS X. I was having the exact same problem. I tried turning off all extensions and that didn't work either. I originally had OS 9 when I got my computer and downloaded 9.0.4 from Apple when it was released. I was about ready to give up when I figured why not reinstall the OS upgrade for the heck of it. I did that and to my surprise it actually worked. Classic now starts up perfectly even with all the extensions I had on before I got OS X. The only problem now is my USB printer won't work in Classic (going now to see if I can figure out how to fix that). Hope this helps.
Michael
P.S. I Love the Dock!!!
Michael
P.S. I Love the Dock!!!