As near as I can tell, the chipset should support the memory.
There are several reasons this may be happening..
1) we could be missing an Address line connection on the motherboard (A12).. maybe Turbo3 can test that..
* my guess *
2) The bios may be expecting memory at 65MB+ to be on CS1 and configuring the chipset in that manner and not testing thouroughly.
3) They may have tied Address line 12 to CS1 (Turbo3??)
4) they may have done something I haven't thought of.
If I have time, I would try connecting CS1 to address line 12. unfortunately, the signal is inverted and that probably happens in the chipset..
This is a 128Mbit chip that uses 11 Address lines
http://www.usa.samsungsemi.com/Memory/DRAM/DRAM_Components/Synchronous_DRAM_(PC66,_PC100,_and_PC133)/128M_bit/K4S281632C/K4S281632C.PDF
This is a 256Mbit chip that uses 12 Address lines
http://www.usa.samsungsemi.com/Memory/DRAM/DRAM_Components/Synchronous_DRAM_(PC66,_PC100,_and_PC133)/256M_bit/K4S561632A/K4S561632A.PDF
The difference is reflected in 2 SODIMMS that are made from corresponding parts
The SODIMM using 128Mbit Parts has 11 Address lines
http://www.usa.samsungsemi.com/Memory/DRAM/DRAM_Modules/Synchronous_DRAM_DIMM,SODIMM_(PC66,_PC100,_and_PC133)/128M_Byte/M464S1724CT1/M464S1724CT1.pdf
and the SODIMM using 256Mbit parts has 12 Address lines
http://www.usa.samsungsemi.com/Memory/DRAM/DRAM_Modules/Synchronous_DRAM_DIMM,SODIMM_(PC66,_PC100,_and_PC133)/128M_Byte/M464S1654BT1/M464S1654BT1.pdf