I have two news for you.Bad one and the bad one;
First,it seems that sameone installed rootkit on your system...
Second,is the fact that Ican't execute(errorno=2)
original /sbin/init binary?
and reason why i am telling you this is that I can't live without this file.It's just kinda of sysbiosis ,so ,boot from clean floppy.
runat root fs and repair /sbin/init from backup.
(and install no again,if you like it)
your rootkit..Have a nace day!