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
For example:
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