Terminal: Application Not Responding
Firstly, I would check to see if the issue is systemic, or related to the user account. Create a new blank user account, and then see if you can remotely log into the computer using that ID.

Then, if that works, try to su to your existing ID.

Also, try a start in single user mode. See what works there. After that, try safe mode.

Interestingly, using Terminal I get the same message in the console as you, but I don't using iTerm. Perhaps you can try iTerm and see if that works. It would narrow the issue down to the specific applications.