If the Permissions you have mentioned came from Leopard how could they have gotten into the computer?
Your additional info clears up that issue, thank you... we can't see/know anything out here that you don;t tell us... well, actually I'm fairly psychic! 😉
With all you mentioned, it sounds like a RAM problem runnung you around in circles.
Besides trying RAM, I think the best way out of this now is DiskWarrior from Alsoft, you'll need the CD to boot from...
http://www.alsoft.com/DiskWarrior/
If not, we might try an Archive and Install feature, which can give you a new OS, yet preserve your files and settings if you have enough room on your HD...
http://docs.info.apple.com/article.html?artnum=107120
But we need to find out the actual cause in the first place, Boot off your Apple Hardware Test CD while holding down c , then run the extended Apple Hardware Test.
If you can't find it, Here's the list and downloads for AHT...
http://www.info.apple.com/support/aht.html