Grey screen after login - Blue Screen of death from CMD+R
Though I didn't experience the blue screen, this does sound a lot like the issue that I described in Boot hangs on grey screen (even when booting from USB drive with fresh OS X install) (I posted as a different user since I didn't immediately have my StackExchange credentials handy).

It seems there are an increasing number of people experiencing failure to boot due to the GPU having died. I'm in Australia and we have just (and are still in) a bit of a heat wave which may have exacerbated the problem.

Anyway, it may be worth trying the steps I outlined in the Q&amp;A I referenced above, particularly booting into Single-User mode and moving the ATI and AMD related extensions out of the way.

HIH