The 126.96.36.199 kernel seems to affect more than just 16-bit applications. I have several Windows 98 bottles and the kernel update breaks all of them. As you noted, booting the previous kernel (188.8.131.52) eliminates the problem for all of them - everything runs as it should.
I haven't examined the issue exhaustively, but here are some symptoms I observed:
- Applications in those bottles won't run when selected from the menu, and these aren't 16-bit applications.
- In the Bottle Manager, all the Win 98 bottles get stuck at "Scanning ..." for hours. As a result, those bottles can't be viewed, edited etc. top shows "wineboot.exe --init" running at 100% for each bottle. Only a "kill -9" stops them.
- Running cxreboot against any Win 98 bottle causes the process to print "modify_ldt: Invalid argument" several times and then hang indefinitely. top shows "wineboot.exe --init" running at 100%. Only a "kill -9" makes it stop.
As mentioned later in the thread you posted (http://forum.winehq.org/viewtopic.php?f=8&t=22540#p94008
), the kernel update seems to affect any binary in certain bottle types whether they are 16-bit or not.
I haven't tried changing the bottle type to Windows XP yet (I'm still booted into 184.108.40.206), but I presume this would restore functionality under 220.127.116.11. Until there's a wine/crossover or kernel update that fixes the issue, the workaround seems to be to change the bottle type to XP, if the underlying windows apps can run without trouble in that bottle type. I'm not sure that will work for me since these are older games (eg. Star Trek Deep Space 9 - The Fallen) that work better under the Windows 98 bottle type based on reports in the compatibility database.