Blue screen and can't login.

See if it will boot up in Safe Mode. This will, besides loading a stripped down version of the OS, do some checking and, if possible, repairing.

Hold down the shift key at the startup chime and give it time. It will take much longer than a regular boot.

Try repairing the disk again booted from the Install Disk.

See "Try Disk Utility"

http://support.apple.com/kb/TS1417

At this point I would try an Archive and Install. Make sure you select "Preserve user and network settings" And certainly better if you have a backup.

http://support.apple.com/kb/HT1710?viewlocale=en_US

It's always a good idea to have a backup, but an A&I should preserve everything.

Too late for that. Now you know. 😟 But you'll probably be alright with an A&I.

FWIW if you haven't tried this already - disconnect all the USB and FW peripherals and see if that makes a difference in startup. On my 27" iMac I had a non-start problem but when I disconnected all the external hard drives, etc., it started right up. I then reconnected those one a time with no problems.

Hope that might help.

If you haven't yet done the A&I, not sure this will help, but you could try a PRAM reset:

At the startup chime, hold down CMD-Option-P-R together until you hear two more chimes, total three, then let go of the keys to finish booting. The chimes may be a long time coming, keep holding the keys down.

I'm not sure if you've already gone ahead with the A&I, but I ran into a similar problem today. The following steps fixed it for me:
http://dltj.org/article/macosx-launchservices-login-loop-fix

WOw. I am having the exact problem in 10.6.5 I hold down for zap Pram but it gets to two chimes and my old OS 10.4.11 starts up. I have OS X10.6.5 on a different drive. I also looked at that fix link.... but I have NO
com.apple.LaunchServices-xxxxx
in my Library/cache folder!
O.P. did you get it running yet? If you did how? I just get the blue login screen, type in my CORRECT password, And just like yours.... it looks like it's starting up. But it goes right back to the start up/ login page. Only difference is I'm on a Mac Pro. I did a search for this problem and found your topic.