So I decided to reinstall.
I downloaded and burnt 2011.6 reboot into this live CD and selected install pclinuxos.
I chose to use existing partitions (as you might recall I have separate (/), home, var) and only format root.
After the install was done, I clicked next, however, the install screen would not disappear.
Used ctl-alt-f1 to get a console and logged in as root. tried to unmount /mnt/install but it was held by a process. fuser revealed it to be /usr/bin/acpid. killed process then executed reboot from the command line.
During reboot, the machine dropped into emergency shell (sh4.1 #)
Typed 'init 5' and the machine continued to complete the install asking for a root password then for a user credentials. Entered the same root password and username/password as the old system had.
Install continued to pick up the old /home and /var directories, and the old user account on home.
Summary: machine now works fine, running 2011.6. I have not lost any data!
I'd like to thank y'all for taking the time to help me!!!