You know you can make your own initrd, don't you?
Most of the time it's the kernel, it's modules, a little loopback file system with supporting applications and configurations.
Most of the time they use busybox. It's just a program that has the most important commands and features of system utilities, but instead of being bunches of little programs, it just has approximations of those programs linked to it.
What happens in initrd is that the bootloader loads linux kernel into ram, then that in turn starts init, which in turns loads the loopback filesystem into memory, untars it or uncompresses it or whatnot. In their there is a little linux psuedo-distro that loads whatever modules with whatever options you need to get to the file system.
Once it loads the modules and then mounts the filesystem it does a chroot command and then continues to execute the scripts in the different runlevels till you get a fully functional file system.
I think it wouldn't be to hard to take a normal distro, like a minimalist install or whatever and copy it to a loopback file and then copy that to a windows partition. Then use a existing initrd creation script and modify that to make your own initrd and then use loadlin.exe to boot into linux from a Dos prompt.
People often do sort of the same thing when they want a encrypted root filesystem. They do the encryption to a file that contains the loopback file system and then just boot into it.
I suppose you could run it from a ISO image and mount that into loopback so you can use a existing setup like Lilo. Just goto modify the initrd and then edit the /etc/fstab file.