Either your video ram has problems or your video card doesn't like to run with a 40MHz bus (PCI is rated fo 33MHz. Running the CPU at 40*3MHz makes the whole PCI bus to run at 40MHz)

Sometimes Windows 9x changes your monitor refresh rate when you change resolutions, sometimes to refresh rates not supported by the monitor. But in such a case, the LCD monitor just goes blank, or when I reset, I get a screen similar to that you've shown above. I battled an issue with this yesterday. Probably is not your issue though. Try setting the FSB to 33 Mhz just to see if the issue is replicated. Also set your cache/RAM wait states to a higher value.

The beeps indicate something "worse" than too high a bus seed.
I can't remember hearing beeps due to overclocking the front side bus... the system just doesn't start up and remains silent. You're getting beeps after the system crashes?

As for the color depth issue - the chipset may be incompatible with your card. I had a Virge/DX on an older chipset(Pentium though) and it does not work once drivers are installed, same when I insert the Matrox Millenium II. Back in 95 when the Mystique was new I had a similar problem - once the drivers were installed or extended functionality was set... the system hung/crashed.

I have also run into issues like this when using too new of drivers, like drivers which were written with the Pentium in mind. Often, but not always, the issue could be remedied by trying out every old driver release and finding the one which works. For example, there was only one or two driver releases out of dozens in which the GF2 would work on a 486. I realise that is an extreme example, but perhaps you are experiencing a similar problem?

Your issue could also be with some PCI BIOS features set. Try changing them.

I'm aware this is a super old thread but there was nobody else that had this board. Does the OP have the Bios for this board? I have the same board and am struggling to find it and get the board booting at all.