This happens for me (not 100% of the time) but OFTEN - only if I already loaded up the SD card with stuff and then after playing some games if I take the SD card out of the Everdrive and pop it into my machine (MAC) and add/delete/modify anything THEN this crash/hang on OS Init happens.
But as previously posted if I just reformat the card and copy a clean OS folder & Romset, it's totally good again.