Log-In Issues with Lion 10.7 on Mac Mini 5,1

Hi guys;

A strange issue with restarting and logging back in to my mac-mini [ 5,1 with the latest revision of Lion ] has arisen and I can't seem to find a solution anywhere.

I was using the latest revsion of Opera which was running unusually slow, so I decided to re-boot;

[ this is my first mac, so took this action as a matter of course coming from a PC background ].

It took a while to reboot [ with the standard light grey screen and white apple logo ], with the end result being the dark grey woven background, the dark grey apple logo, a circular icon in the centre of the screen below the apple with an owl's face and the name of the mac below it; three options are down the bottom, 'sleep' [ with a circle icon and a line inside of it at the bottom ], 'Restart' [ with a circle igon and a reverse 'play' icon inside of it ], and 'Shut Down' [ which has the standard 'power on-off' symbol; Refer image below:

Strangely, none of those options are selectable; I'm using the apple wireless keyboard and trackpad which seem to be operating normally;

I tried a hard restart with the power button and rebooted to the same screen; I tried again in safe mode and this time a password dialogue appeared below the name of the mac; I entered my password which resulted in this screen:

My preference was to create a new keychain because I recently reset the password because I couldn't remember the old one [ a password I entered in a hurry with the Apple salesperson standing right next to me upon set-up ]; However - the trackpad couldn't select the option, nor either of the other two options, so I hit enter on the keyboard to 'update keychain password'. I couldn't proceed anyway because I don't know the old password.

So I cancelled the operation and then my desktop screen slowly faded in [ stuttering like a very slow camera shutter ]; It took a few seconds to load everything and I attempted to use various apps including Opera, which all worked ok - took a few seconds to 'warm up' but eventually all worked as per normal - except Launchpad;

Launchpad struggles to appear [ fading in with the stuttering I mentioned above, and similarly upon swiping left to see the adjacent page ]; I tried for about half hour to see if it would come good, to no avail.

I rebooted again and was faced with the Owl of Death screen that I started with. The mac is not overheating or anything like that.

Any help would be much appreciated; I've made no changes to the mac apart from [ finally ] getting a cable broadband connection last week; the mac is connected via ethernet to a Netgear CG3100, which seems fine.

It's always on, just in sleep mode, and always connected to a Sony KDL-40NX720 television, a superdrive and the wireless keyboard and trackpad when in-use. Log-in is not normally required upon restart, just loads directly to the desktop. I've not had any issues with this computer up until now. I recently performed a software update after getting the cable connection and all software is up to date.