It could be that wlnotify is having trouble with damaged accounts. Can you enter Administrator in Safe Mode? If so, create an account with another name. Try to start into that, if it works copy over your files.
Hey Gerbil - long time, no see! :)
That's not a bad idea. If that is a no go, perhaps recovery console? Or maybe popping the hard drive into another PC as slave?
I think there are plenty of options to recover data before a format.
I wonder if that last run of MBA-M borked something.... It certainly would not be unprecedented.
PP :)