FWIW I've got a working PIII/3c905b/terayon setup. 
My only initial  problem with it was dyslexia: 509 is  not the same as
905! IOW, you need to use the right driver, which in my case means

alias eth0 3c59x

in /etc/modutils/aliases. 

Before that I tried two different  NICs to no avail, which leads me to
believe  NICs may be  inherently flaky. So maybe  try another  one (I
convinced my local h/w vendor to  lend me this one, slightly used, and
I ended up buying it).  

-chris




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