Kernel panic

panic(cpu 1 caller 0x47f5ad): "process 1 exec of /sbin/launched failed, error 2\n"@/SourceCache/xnu/xnu_1504. 15. 3/bsd/kern/kern_exec .c:3145

Debugger called: <panic>

Backtrace (CPU 1), Frame : Return Address (4potential args on stack)

0x30ld3e48 : 0x21b837 (0x5dd7fc 0x301d3e7c 0x223cel 0x0)

0x301d3e98 : 0x47f5ad (0x5cf950 0x831c08 0x2 0x0)

0x301d3ef8 : 0x4696d2 (0x5d7cd20 0x1fe 0x5b1a690 0x80000001)

0x301d3f38 : 0x48fee5 (0x5c3cb7c 0x84baa0 0x301d3f88 0x2a45c9)

0x301d3f68 : 0x219432 (05c3cb7c 0xffffff7f 0x301d3f88 0x2a45c9)

0x301d3fa8 : 0x2aacb4 (0xffffffff 0x1 0x22f8f5 0x227c4b)

0x301d3fc8 : 0x2a1976 (0x0 0x0 0x2a17ab 0x5613c34)

BSD process name corresponding to current thread: init

Mac OS version:

Not yet set

Kernel version:

Darwin Kernel version 10.8.0: Tue Jun 7 16:33:36 PDT2011; root:xnu-1504.15.3-1/RELEASE_1386

System model name: iMac4,1 (Mac-F42787c8)

System uptime in nanoseconds:1366229301

I was transferring data from Time Machine backup to a 20"core duo iMac using Snow Leopard DVD when I aborted the process, I then got tthe above message. Tried to reset the PRAM, start in Safe mode, start in Target mode and various other methods without success. Still won't start. Snow Leopard is still inside the machine and refuses to come out. Need help.