Hello again,
I tried today other VMs from 
http://www.is.titech.ac.jp/~ohshima/squeak/WinCE/030206/ but all of them 
are giving me the same error. I tried to strip the Squeak3.0.image using 
  MajorShrinkFor3.0.cs and i got file around 850KB, but it doesn't work 
even with this file. Hard reset of the Jornada didn't help either. I 
know there are people who succesfuly run Squeak on the Jornada, because 
I found few screenshots, but no tips to make it running.
Any help is wellcome.

Petr