Gave up on recovery of the current build and am reformatting and re-installing. Tried first from a time machine backup. The restore gave me the same problem with login attempts. Tried a OS X reinstall, but that failed "Due to an error" (thanks Apple for such helpful Window-esque error messages). Trying now a format and restore from my oldest time machine backup.
Got everything to re-install and it worked fine...for a few hours. Then I came in to find ALL of my network users deleted. Just GONE. Then found out the Open Directory was trashed and was unable to open, recover or restore from a backup. Looks like I may have a bad drive here.
I installed a new drive in the system, re-installed and so far (for a couple of hours anyway) the system seems to be working and stable.