It sounds like the Hitachi with your home folder may have died or become problematic, in one way or another. This won't solve that problem, but it may help to get you to be able to at least log in. These instructions are for resetting a password with a CD, not your issue, but it will allow you to create a new admin account, so at least you will be able to login. Not sure what will solve the problem with the Hitachi, if it won't mount because, for all intents and purposes, it's dead. If that's the case--and can't be certain it is--you might need some kind of recovery software. (Google that for Mac. There are many available programs.) That booting in Safe Mode doesn't fix the issue is not a good sign.
Make certain you give this new account admin privileges.
Reset Mac Password – without a CD or Boot Drive
reset mac password Using a pretty nifty trick you can reset a forgotten Mac password without a Mac OS X installer CD/DVD or any kind of boot drive or recovery partiton, and without having an Apple ID. This is basically the be-all-end-all approach if nothing else works, because it’s guaranteed to get you back into a Mac when the other options are available, and it works in literally all versions of OS X. The steps may seem a little intimidating at first but I assure you it’s easy if you follow them exactly, here is exactly how to do this in three stages:
Stage 1) Boot into Single User Mode and remove a setup file
Restart the Mac holding down the Command+S keys, this will take you into Single User Mode and it’s Terminal interface
You’ll need to check the filesystem first:
Next, you must mount the root drive as writeable so that changes will save:
mount -uw /
Now, type the following command exactly, followed by the enter key:
reset forgot mac password
After removing the applesetupdone file, you need to reboot, type ‘reboot’ and hit enter
Stage 2) Create a New User Account upon System Boot
You aren’t finished, but the hard part is now over – no more command lines, you’ll now be in the familiar Mac OS X GUI to finish the password reset process. In this step we just create a new user account as if you just got a new Mac:
Upon reboot, you will be presented with the traditional “Welcome Wizard” startup screen just like when you first get a Mac
Follow the welcome wizard and create a new user account – making the account name different from the account whose password you want to recover
Continue on and boot into Mac OS X with this newly created user account, this new user account is an Administrator and has administrative access
Yes, there is a space after rm. Your problem isn't a forgotten password; this is only so that you can create a new account and be able to log into it, so you don't go any further with resetting the lost password. The new account will of course be empty, but from that new account, you may have more options for recovering the apparently lost home folder on the Hitachi. Honestly, at this point I don't know what those options might be.