Oh man, this sounds familiar. I hope you don't have the same thing I ran across with someone recently. I posted about it on this board actually. Sadly, it had gotten to the point where we couldn't get into safe mode either, so we ended up wiping the machine and starting over. I sincerely hope you don't need to do that (at least the data is recoverable, using a second computer), but sometimes it's the only way.
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Matt