Weird Login Loop problem on Jaguar

A friend of mine is having a bizarre OS X problem, so I'm here on her behalf asking the most experienced board in the world if THEY'VE got some ideas on what the heck is wrong. Okay, she has (I believe, based on when she bought it, though I can't be entirely sure) a rev B. 12" PowerBook w/ combo drive which has behaved just fine for the time she's had it. It shipped with Jaguar and she's never upgraded (I know, terrifying), although she's done Software Updates, so it's likely she has 10.2.8.

In any event, here's what happened according to her. Until yesterday her machine was behaving as usual, no problems. Then someone was using her machine, and the next time she went to turn it on, it wanted a password when she logged on. I guess before this she just had auto-login enabled. If she enters the wrong password, it shakes and doesn't do anything, as you'd expect. However, if she enters the correct password, it starts to load like it's going to go to her desktop. The bar goes across, the login screen disappears momentarily, and then comes back! Her desktop never loads, no menu bar or Finder or Dock, just right back to the login screen after it briefly disappears. She's not sure what this friend of hers did, exactly, but this is the strangest problem I've ever heard of! Worst comes to worst we can always just FireWire disk target her Mac with mine and backup her stuff and reinstall everything, but that's a huge pain. Any ideas on what I can do to fix this login loop without having to start her from scratch?