Ignore that Base System entry. Here's what you can try. Time Machine contains a hidden Recovery HD from which you can boot but you must use OPTION boot to get to it:
Boot Using OPTION key:
1. Restart the computer.
2. Immediately after the chime press and hold down the
"OPTION" key.
3. Release the key when the boot manager appears.
4. Select the disk icon for the Time Machine backup disk which may be named, Recovery HD.
5. Click on the arrow button below the icon.
This will boot into the Recovery Utilities Menu. Proceed as follows:
Erase the hard drive:
1. Select Disk Utility from the main menu and click on the Continue button.
2. After DU loads select your startup volume (usually Macintosh HD) from the
left side list. Click on the Erase tab in the DU main window.
3. Set the format type to Mac OS Extended (Journaled.) Click on
the Erase button and wait until the process has completed.
4. Quit DU and return to the main menu.
Reinstall OS X: Select Restore from Time Machine backup. Click on the Continue button.
Note: You will need an active Internet connection. I suggest using Ethernet if possible
because it is three times faster than wireless.
This should install the version of OS X that you had installed.