Yep, it's a bad HD. Quoth vm-05-30-13.8566.tgz/var/log/system.log:
May 30 12:31:39 kernel[0]: disk0s2: I/O error.
May 30 12:59:34 kernel[0]: disk0s2: I/O error.
May 30 13:01:03 kernel[0]: disk0s2: I/O error.
May 30 13:02:28 kernel[0]: disk0s2: I/O error.
May 30 13:03:11 kernel[0]: disk0s2: I/O error.
And your system profiler report says that's your 500GB Hitachi internal hard drive.
Hitachi HTS545050B9SA02:
Capacity: 500.11 GB (500,107,862,016 bytes)
Model: Hitachi HTS545050B9SA02
Volumes:
Macintosh HD:
Capacity: 499.25 GB (499,248,103,424 bytes)
Available: 206.4 GB (206,397,296,640 bytes)
Writable: Yes
File System: Journaled HFS+
BSD Name: disk0s2
Mount Point: /
Content: Apple_HFS
--
Darius