KVMifying an old distro
What would I need to do to convert this to boot KVM using my distro kernel?
Install whatever package in your distro provides the kernel.
Make sure you never use disk names in a hardcoded way. For example, if you have /dev/xvdb somewhere in /etc/fstab
and KVM makes the disk to become /dev/sdb, you will have a problem. Use UUID= everywhere.
Create a grub1-style menu.lst which is suitable for your system. The easy way to do that is to install the grub-legacy package itself if it's available.
In the Linode dashboard, change the boot method to pv-grub-x86_32 (as you said your system was 32-bit).
If your (still) Xen system boots this way, congratulations, you should be ready to switch to KVM using your own kernel, as you asked.
Open a support ticket to ask that your linode is changed to KVM.
Select grub-legacy as the boot method in the Linode dashboard. The external grub-legacy will read your menu.lst and will load and boot your kernel.
Note: I have not tested the KVM linodes myself, so take everything I said with a grain of salt…
Edit: I have edited this post after realizing that pv-grub follows grub1 syntax.