This problem has now been fixed.
A co-worker who has 20+ years of *nix experience, helped me through the problems. We we're eventually able to recover the server to the point where we could boot up with no errors, however none of the deamons would start. We would get the login prompt and after typing in the username it would go right back to asking for the username again. So we booted up in single user mode, loaded the NIC, and was able to connect to an outside ftp server, and ftp all the files out.
I then tried an "upgrade" to the OS, to see if it would fix it, and it didn't. It still wouldn't load the deamons, so at that point, I simply did a full re-install. However this time I did the "sme noraid" function, so that if problem occur in the future, I can just mount the partition normally without all the previous issues.
At this point the problem is resolved, but I do recommend for people in the future that if you run the software raid feature, MAKE SURE you have a backup BEFORE you start messing around with updates. LOL.

Cheers and thanks to everybody for the suggestions,
Spyrule.