Fortunately I had my previous configuration saved to compare against. Also, I knew what I had explicitly changed after invoking 'make oldconfig'. It was this little guy here:
Looks like it is not working fine with my hardware configuration. Disabling it in the .config using xconfig fixes it. Thought I should share in case someone else is facing this, too.
Oh, and I decided to give the following a try for more responsive desktop environment:
# CONFIG_PREEMPT_VOLUNTARY is not set
Yet to think of a test to feel the difference. At least the kernel boots :-)