I was having exactly the same issue a few days back. /home somehow became read-only. So what I did was using this to get into mass storage mode and check the file system with GParted in Ubuntu. And it worked fine.

I don't know if things can still be fixed like this in your case, as it looks so f*cked up. But since you already backed things up, I think reflashing might be better for system stability.

Flashing guide http://wiki.maemo.org/Updating_the_firmware
Nokia took down the repository for images and flasher, so these are mirrors:
Images http://skeiron.org/tablets-dev/nokia_N900/
Flasher http://skeiron.org/tablets-dev/maemo_dev_env_downloads/

Flashing procedure is the same, just need to pay attention to the filename of the image.

I think you only need to flash rootfs, so don't flash the eMMC and MyDocs will be intact.