Answer to: Kernel Panic on startupI would start by trying to isolate hardware from software issues. Best way to do that is to boot the machine to an freshly installed OS on a bootable thumb drive. If the issue persists its a hardware issue, if not you have isolated it to a software issue.
Answer to: Broken screen, do I need a new LCD too?Matt, if you can see the full image on the screen, then the only damage the ipad sustained was the glass. If there are any visual imperfections in the image quality such as lines, discoloring, color bleeding, and dark spots then the LCD was damage as well.