I have finally managed to do it!
First I used Turco_ninja's method but the MBP Install partition wouldn't boot so I could not do a fresh installation on a new HD.
1) I did manage to get the Install partition to boot properly after I edited the Info.plist file in the ATI5000Controller.kext to include my graphics card ID (0x68BE1002). It's a HD5750 BTW.
2) After I did the fresh installation I booted from my original SSD, ran the 10.6.7 MBP Combo update on the new HD. Make sure your smbios.plist has the MacBookPro8,x line in it otherwise you won't be able to run the Update.
3) I then edited again the Info.plist file in the ATI5000Controller.kext to include my graphics ID (0x68BE1002) on the new HD.
4) I then ran Chameleon 747 on the new HD, choosing only the ChameleonRC5 option, so I can boot from it.
5) I then ran Mulltibeast using only the System Utilities, ALC Audio 892, Lnx2Mac Realtek, FakeSMC, NullCPUPowerManagement, Sandy Bootloader, 64-bit Apple Boot Screen and MacBookPro System Definition options.
6) I then deleted the GraphicsEnabler line in com.apple.Boot.plist.
I could now reboot straight from the new HD and it runs the latest kernel (6 March).
So there were two crucial things to get it going:
1) Edited the Info.plist file in the ATI5000Controller.kext to include my graphics ID (0x68BE1002). This solved the hanging at boot. If you have a different graphics card you might have to do something else.
2) Use the NullCPUPowerManagement kext. Without it you get a KP when booting.
I also found out that I couldn't change the SMproductname in the smbios.plist file. If I did I got a KP at boot.
I am now going to try to run the 10.6.7 Update on my existing SB installation and see if I can get it working using the information above.