Kernal panic issue

16 GB is an unsupported configuration for your model Mac.

"Unsupported" does not mean "it will not work" but it does mean unexpected things may occur — as you appear to be experiencing.

I suggest using Apple Hardware Test in an effort to isolate the cause. You will need to boot from its original, grey, Applications Install Disc 2.

How to use Apple Hardware Test (archived)

If you cannot locate that disc the Internet version of AHT may be available. Anecdotal reports indicate it is no longer available.

Instead of upgrading the memory, you should have first identified the cause of the original memory issue by determining if one of the original RAM modules was bad, or one of the memory slots. Many times the memory slot nearest the Bottom Case goes bad due to cracked solder joints.

Also, what is the make & model of the memory you installed? Macs are very picky about the memory they use so it is best to only use memory from Crucial or OWC. Even if you are using Crucial memory...is it labeled as "For Mac" or "Mac Compatible"? The modules may not have this on their label anymore, but the plastic packaging the memory shipped in should have had it written on the packaging. This goes to show that not all Crucial memory is compatible with a Mac. I'm not saying other brands of memory won't work, but it is much harder to be sure the other memory is compatible with a Mac since Apple does not publish all of the technical details to ensure compatibility since the main speed is not enough to ensure compatibility.

While you can use the Apple Diagnostics to try to test the RAM, it is not very thorough. A more thorough test is using a bootable Memtest86 USB stick. If the default Memtest86 settings don't find a problem, then try customizing the Memtest86 CPU settings to "Sequential" or "Round Robin". I've been able to use this to provide more repeatable failures in order to better identify which RAM module or RAM slot may be bad. While Memtest86 may show a memory error, in my own personal experience recently...many times the test will just freeze the computer which is just as useful to figure out which RAM module or slot is bad.