I've seen one other person with the same issue. Everything was working fine one day and then the next day the OS just will not boot, complains about not being able to read the SD drive.
Looks like all I can do is start again with a clean image on the SD card. I'm not over the moon about this since I've compiled two different versions of Ruby from source over the last couple of days, each taking hours.
I've downloaded the wheezy image and I will have a play with that tomorrow see how well that goes.
If I put the old SD Card in my Mac is there any way to get some of the scripts that I created on the SD cards linux filesystem or is everything gone forever on that card?