Thanks to mcasteel's suggestion about deleting the various classic files, and then restarting, Classic now starts up, even with all extensions on.
Thanks for the tip.
After installing the 10.1.2 update, Classic no longer starts up. I have tried booting "normally" and with extensions off (via the advanced tab) but it always gives an error "sorry a system error occured--"system" unimplemented trap"
I can boot into 9.2.2 as the startup system okay...