If you have a sc_selcharacter_en.pac (The en may be different for non NTSC regions) in your SD card that may be the issue. Replace it with a new one. It may not be compressed right or be corrupt. If you don't have one try removing all hacks but one character hack. If it doesn't freeze add another character. Doesn't freeze again add another. Do this until it freezes. If it never freezes put a different type of hack (music, stage, effect, etc) in and repeat the process. Tedious yes but it can tell you what file is messing it up.
That's what it sounds like to me; I had this issue once when I accidentally changed the compression of a CSP and once when I forgot to resize a CSP to 128x160.
Luckily at that time I was testing every 6 CSPs so finding the issue was easy... my current issue isn't near as much... I did all my Random Stage Select Banners at once and common5 doesn't like it... Tedious Trial & Error HO!