I have a similar problem. The printer works fine with WIN 98SE, but not with XP SP2. I have tried debugging this with HP support without success.
XP recognizes the USB connected printer, and loads the correct driver. On hitting print, a page feeds, and the print heads make a single pass. Things then hang. The document waits in the print queue. HP support suggested trying the generic 550 driver, but that didn't help.
Could this be a timing problem? I moved the printer from a 450 MHz P3 to a 2.8 GHZ P4. I would expect a properly written driver to provide correct flow control.
I have an HP895Cse printer, OS WIN XP. The printer top right bottom button light is blinking and I can't print. However, i do not see any paper jam. I went to the HP website and install the latest driver, no luck.