RHEL 5 OS does not detect entire memory when running non-PAE kernel even though total memory allocated is 4G

Issue

• RHEL5 guest running  in a virtual environment (vSphere 4).
• Recently upgraded the memory from 2GB to 4GB but, after restarting, the OS only sees 3GB (2906MB to be exact).

#free 
             total       used       free     shared    buffers     cached
Mem:       2976552    2864464     112088          0     188556    2081252
-/+ buffers/cache:     594656    2381896
Swap:      4128760          0    4128760

• Confirmed that the latest version of VMware Tools is installed and that vSphere has allocated 4GB of memory.

• Snip from dmesg where the kernel recognizes only 2GB even though it seem to detect the entire alloted 4GB.

  Warning only 4GB will be used.
  Use a PAE enabled kernel.
  3200MB HIGHMEM available.
  896MB LOWMEM available.
  found SMP MP-table at 0009c140
  --
  Memory: 2043908k/4194304k available (2178k kernel code, 40824k reserved, 
  907k data, 228k init, 1168496k highmem)