This sounds similar to what I just went through. Do you have an external drive you can boot with? If so, I'd use that. Then, if you can access the normal boot drive backup whatever is important to you first. Then see about running disk utility. If disk utility (or fsck in single user mode) fails then you'll need to reformat the drive and reinstall the system.
I ended up doing a long reformat on my HD (zero all, since TTP4 found a bad block) and then did a clean reinstall of Panther. The difference in overall responsiveness is astounding! I started using OS 10.1 and had just upgraded from that to Jaguar and from that to Panther (though, I may have used a clean install of Jaguar when I got this HD, but I can't remember.) Between that and maybe just a better laid out hard drive, applications launch in one bounce or less instead of typically three. The speed boost at least was a positive to go along with the hassle.