Brand New 27" iMac i5 will not boot after installing software updates

I just purchased my new iMac 2 nights ago. I have been getting it setup with my apps, mobile me account, etc, and luckily just setup time machine and let it do a full backup.
I just ran Software Update for the first time, and now the machine will not boot. It hangs on the grey screen for about 1 minute before the Apple logo comes up. About 30 seconds after the Apple logo comes up, the grey spinning gear shows up, and about 1 minute after that I get the grey screen of death (You must restart your computer).
Any suggestions? A little frustrated here....

If you mean did I receive error messages, No, I didn't. However, the desktop reverted to the default purple night-sky looking thing, my applications and such all disappeared from the dock, and I couldn't open any files or folders (you don't have permission to ...), etc. I tried signing out and back in, rebooting, using a second admin account on the computer, creating a new admin account, etc. I ran Disk Utility, hardware checker, etc. No errors were found, and nothing changed. I could see all my files and folders, but they had a small red circle in the corner, indicating "locked" or "no permission".
I'll find the lines from the console log if that will help. The error showed up immediately and is in the computer's attempt to access the user/library/application support/sync services and same path to user/library/logs/sync services/log. (or something reasonably close to this. If you can use the exact path, I will get it) The link between my settings and files, and a password is apparently corrupted or something, so that the computer won't even let me change the desktop or any file, so I can't save, edit or discard anything, and can't drag files to another computer on the home network.
At least I'm still under the 90 day warranty, so I can call tomorrow. At this point, the SMART check says the drive is good, so I assume it's software. The only things new are the three auto Apple software updates I installed yesterday, so I immediately suspect them. But who knows?
Does this help you at all?

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