> I cant seem to find these files using spotlight. Do they typically live in a folder? Other ways of locating them?
If you are really replying to me and my suggest that you look at the shell initialization files .bash_profile, .bash_login, .profile, and/or .bashrc, then Spotlight is not going to find them, and neither is the Finder as they are "Hidden" files. Any file beginning with a dot (period) is not normally displayed.
Normally you would use the Terminal with the 'ls -a' command to see these files, HOWEVER, Linc and I are well aware that it is getting a working Terminal session that you are trying to do :-)
Try this Linc suggested trick.
Applications -> TextEdit
File -> Open
Shift-Command-Period
... if you are not in your home folder, navigate to your home folder
... see if you have any of the following files
.bash_profile
.bash_login
.profile
.bashrc
Note, you may not have any of the above files, and they do not exist by default, but since you are having problems getting a working Terminal session, and the behavior does not change when you use iTerm, that strongly suggests it is something that initializes your shell.
If you do have any of these files, open them, and look at the contents. It is possible something is being run that is affecting your Terminal session.
Another diagnostic trick would be starting Applications -> Utilities -> Activity Monitor. Set the "process" pop-up button on the right to "All Processes, Hierarchically". Now find "Terminal", then click on the triangle to expose processes that are running under Terminal. Keep clicking the triangles under Terminal until you see all the processes that are running under Terminal. Chances are if something is running that is affecting your Terminal session you will see it. While this will not cure your problem, it might help identify what the problem is.
Terminal
login
bash
... is there something at this level? ...