Sorry for the thread Necromancy here. I just picked up a 2005.5 (I believe, I am not 100% sure anymore since it wont boot)
I am having the exact same issue as the OP.

Full story : When I got it from my brother-in-law it would load up ok, but then freeze whenever you hit the touch screen. After a while it would unfreeze, and the demo would start again, but whenever you touched it it just froze.

I hooked up a keyboard and looked at the bios, I didn't change anything other than updating the date, I also had a serial mouse that I plugged in to try and get somewhere else in the menu. So I updated the date to today and rebooted. At one point it said it was making some changes for the touchscreen (I assume because of the serial mouse instead of the proper touch screen) so I restarted and plugged the normal touch screen cable for the mouse part in. Now all it does is keep going through all the checks which are "ok" it gets to some login prompt which then promptly says "REBOOTING TO PERFORM SYSTEM MAINTENANCE..." before restarting. And it just keeps looping now, it wont even get into the menu.

With some internet searching and advice from a seller on ebay. Setting jumpers 4 and 7 on the IO board to "reset" the hard drive data actually worked. My Megatouch Force 2005.5 is now working perfectly. Now I just have to decide if I want to upgrade it to 2011 software, which would cost me about $200 for a disk and the security key. I am not sure what all is different if it's worth the money to upgrade or not.