Reinstalling Lion HELP!!!!

From your post it sounds like you have one Mac that won't boot and one Mac that boots Lion just fine. On the good Mac, you can make yourself a Lion install USB. Apple makes a usb utility available for free. It uses the Lion recovery partition and makes a recovery USB. I think it will work on 4GB or possibly even a 1GB USB. The down side is Apple's official method requires downloading a crapload of stuff over the internet. Another down side is Apple's utility wipes your usb even if it's a 1 TB HDD with your only backup on it. Use a small USB stick, not your TM backup destination volume!

While we're talking about downloading a crapload of stuff, I should mention that I've heard, but never actually gotten it to work, that you can hold down option and click install on Lion in the app store and it will download it again. This is good because you can do "show contents" on Install OSX Lion.app and browse around inside for InstallESD.dmg. From this you can use Disk Utility to make your own recovery USB on any 8 GB or larger USB stick and this time it won't require downloading much other than the 10.7.2 combo update after you are done.

 

On your other computer, you can just hold down option and redownload Lion. Once it's downloaded, you can right click and find the InstallESD.dmg, copy that to your desktop and then put in your USB thumb drive. Go to Disk Utility on the good computer and select the drive and navigate to the restore tab in Disk Utility. Select the InstallESD.dmg to the USB drive. It will erase whatever's on the USB drive and put InstallESD.dmg on the thumb stick. You can restart the bad computer, hold down option to boot from the USB and install Lion.

 

Did you forget your Apple ID password or something? If so, you should be able to reset it here:

http://www.apple.com/support/appleid/

After that, follow these instructions to make a lion disk or usb:

http://reviews.cnet.com/8301-13727_7-20080989-263/how-to-create-an-os-x-lion-installation-disc/