I had recently changed the NV RAM chip. The new chip I installed was faulty and this strange (reseting, unable to boot) result was because of the chip. The machine was also behaving the same when I removed the chip from its socket. I replaced with a good one and everything came back to normal.

TIP: When you change the NV RAM chip, do a HARDWARE RESET of the NV RAM (Alt+Ctrl+right Shift+Undo) during bootup screen (Atari logo) because otherwise the system does not accept new settings, besides date/time.