The problem is that OS/2 needs some files to boot before it loads the HPFS driver and can see the files it needs.  By trial and error (and by looking at the Install boot floppy, which provides most clues), I've come up with the following minimum OS/2 boot configuration which allows me to keep most of OS2 (including all of PM) on an HPFS partition (drive E: in my case).  Here are my directories, and then I'll post my config.sys:
 
 The volume label in drive C is.
 The Volume Serial Number is 24F8:FC15
 Directory of C: \OS2
 
.            <DIR>      3-16-90   2:31a
..           <DIR>      3-16-90   2:31a
DLL          <DIR>      3-16-90   2:31a
INSTALL      <DIR>      3-16-90   2:31a
SYSTEM       <DIR>      3-16-90   2:31a
BOOT     COM    40768  11-02-90  12:00p
CACHE    EXE    14496  11-02-90  12:00p
CHKDSK   COM    67376  11-02-90  12:00p
HPFS     IFS    99962  11-02-90  12:00p
OS2      INI    94855   1-04-91  10:32a
OS2SYS   INI     6979   1-03-91  12:59a
VIOTBL   DCP    52150  11-02-90  12:00p
     17 File(s)   10428416 bytes free
 
 The volume label in drive C is.
 The Volume Serial Number is 24F8:FC15
 Directory of C:\OS2\DLL
 
.            <DIR>      3-16-90   2:31a
..           <DIR>      3-16-90   2:31a
ANSICALL DLL     3333  11-02-90  12:00p
BKSCALLS DLL     6509  11-02-90  12:00p
BVHVGA   DLL    36970  11-02-90  12:00p
BVSCALLS DLL    21633  11-02-90  12:00p
DOSCALL1 DLL    12927  11-02-90  12:00p
KBDCALLS DLL     7721  11-02-90  12:00p
MOUCALLS DLL     4844  11-02-90  12:00p
MSG      DLL     5244  11-02-90  12:00p
NLS      DLL     4023  11-02-90  12:00p
QUECALLS DLL     9626  11-02-90  12:00p
SESMGR   DLL    23924  11-02-90  12:00p
UHPFS    DLL   156672  11-02-90  12:00p
VIOCALLS DLL    16087  11-02-90  12:00p
     16 File(s)   10426368 bytes free
 
 The volume label in drive C is.
 The Volume Serial Number is 24F8:FC15
 Directory of C:\OS2\SYSTEM
 
.            <DIR>      3-16-90   2:31a
..           <DIR>      3-16-90   2:31a
CONFIG   DOS      122   9-14-90   8:53p
BOOT     DOS      512   1-02-91   2:41a
COUNTRY  SYS    24466  11-02-90  12:00p
HARDERR  EXE    11392  11-02-90  12:00p
OSO001   MSG   107768  11-02-90  12:00p
OSO001H  MSG   182171  11-02-90  12:00p
SWAPPER  EXE     1572  11-02-90  12:00p
AUTOEXEC DOS      199  10-18-90  12:47a
     11 File(s)   10424320 bytes free
 
 The volume label in drive C is.
 The Volume Serial Number is 24F8:FC15
 Directory of C:\OS2\INSTALL
 
.            <DIR>      3-16-90   2:31a
..           <DIR>      3-16-90   2:31a
SYSLEVEL OS2      169  11-02-90  12:00p
     4 File(s)   10422272 bytes free

--- Maximus-CBCS v1.02-OS/2-r2
 * Origin: OS/2 Shareware BBS, Fairfax, VA: 703-385-4325 (1:109/347)