Intel Mac :: Deleted Old User Account Now Can't Log In?

The other day I decided to reinstall OSX from scratch (Lion). So, formatted and reinstalled. Reinstalled all the programs and updates I wanted manually, then used my TM back up to recover my iTunes, documents and pictures. This is where problems began as my new account (Alex Mason) was named exactly the same as the old one present in the TM backup. Migration assistant created a new user account (Alex Mason2). So I have my new set up in one account and my old documents in another! So I got into the USER directory and transfered them between accounts. So far so good. 

Then came the issue of removing the Alex Mason2 account. At first this was straight forward. Go to the user accounts pref pane, select Alex Mason2 in other accounts and press the "-" sign. Done. 

But then, it reappeared! And this time I couldnt get rid. I found this on the support forum here: [URL]...and I followed it to the letter. It describes exactly my situation, that a 2nd user account created because of a name clash when using migration assistant may reappear after initial deletion. 

After doing so, the account Alex Mason appeared in its place in the other accounts bit on the pref pane. This confused me because I was logged in as Alex Mason so how could that also be another account? It wasnt there before, so why now? I exited the pref pane to see if that sorted things out. 

Then I couldnt get back on the user accounts pref pane as OSX said it could not load it!. In the hope of sorting things out again, I restarted the iMac only to be greeted by a grey screen (with the cloth texture) and a user + password dialogue box that were empty. Putting my credentials in resulted in a loading icon in the password box and that was it!! Nothing. Nada. Can't log in. 

I tried repairing permissions (of which some were repaired) and got the same result. I restored via TimeMachine and deleted the second account again. Same again, it disappears but the login name still appears at the log in screen and shortly after, the user re-appears in the user account pref pane again and this time I can't use "-" to delete it. I am wary of trying the above link again. What did I do wrong?! and how can I deleted that second account!

Info:
iMac (27-inch Mid 2010), Mac OS X (10.7.3)