Well I made a little more progress. If I unplug the ethernet cable while the computer is off, and power on the computer, it will stop at the step "Waiting for network intilization." for about 20 seconds and then continue loading. When I boot it this way (without network cable connected) it does not even stop at "Login Window Loading" and continues to the login screen with the options "Administrator" or "Other...". I'm beginning to think this is network related, not OS related, because the "Sleep" "Restart" and "Shutdown" functions and the login window work without the ethernet cable connected. But I can't login because it can't get the user list from the server.
I also had a question. When you connect two computers together with a firewire cable, does the one that you want to read from have to be logged in? If not I could connect the broke mac and the working one next to it and run repair permissions on the broken one's disk from the working one.