iMac stuck on grey screen w/ apple logo & rotating wheel after upgrade to build 5600

*The issue*

My 2.4 GHz iMac with latest Leopard OS and registered copy of Parallels 3.0 (having two Guest OS - XP&Win2K) is stuck on boot loop with Gray screen, Apple logo and rotating wheel after i downloaded build 5600 of Parallels Dektop 3.0 and installing it.

*Details*
- After downloading and installing latest build 5600 I started Parallels Desktop
- It showed the Guest OS selection option and I selected win2K
- I checked the build and it was 5600
- Problem started when the Guest OS did not load for a long time and i had to Force Quit the application
- The Force Quit gave me a semi-transparent dark grey screen telling me to restart iMac as there was sone issue
- Since then i am stuck in Boot Loop
- I went into verbose mode (Command-V) and found Parallels was trying to contact windows via AppleVNCServer (something close to this - see the attachment)
- That showed failing again and again and it seems that is where booting is stuck

*Need Help*
- Do I wait on Parallels team for support (there is no phone support and 3 days for email support is kinda long when i need to be back up in few hours)
- Do i call Apple Care (which i already did) and go for "Archive + Install"
- How do i back up my data (unfortunately have no back up)

I will check back in an hour, else may have to go to Apple with re-installation.

 

FYI - I had to do a Repair for OS X as did not get any help on it!

 

As a first step please login in Single Mode and perform fsck
see details in
http://support.apple.com/kb/HT1492
perform fsck
http://support.apple.com/kb/TS1417

also try to check free space
df and search for line something as /dev/disk0s2
if there is available less then 500 mb , try to free some spaces