The fact that ls wasn't found means that the /bin/ls file doesn't exist.
The error you have on boot is that /sbin/init also doesn't exist.
You probably have a corrupt filesystem, which could be caused by a damaged hard disk (assuming that no-one's actually deleted the files). It's a shame that you rebooted straight away since it would have been nice to see the log entries (/var/log/messages and the dmesg command) to see if there were any reported errors.
There are some things you can try here, for example, you could use init=/bin/bash to be dropped into a shell when you log in, bypassing /sbin/init completely. But that won't work if /bin/bash is broken.
The best thing to do is to download a live CD, boot from that, and then run fsck to do a check of the disk. System Rescue CD is a live CD tailored towards system recovery; I've never used it but there's quite a bit of documentation on their website: http://www.sysresccd.org/Main_Page
You will need to run this for each partition on your hard disk (you can get the device names for the partitions from the gparted program).
Hope that helps,
—Robert J Lee