What to do when I cannot boot the Recovery partition?

tl;dr

When I hold 'alt' during boot, and select the Recovery partition, the computer displays the bright grey screen with an Apple logo, and a spinning work indicator. But after a few hours nothing has yet happened.

Running an updated Yosemity install

Long version

I was working on a rake script which tried to create a directory relative to my home folder. I used a ~ in the script, where I should have used the $HOME environment variable.

No big deal, that just created a folder named ~ in my current working directory. Of course this shouldn't be there so I deleted it with

rm -rf ~

Bad idea! After about a second, due to the fact that the operation wasn't complete, that I had tried to delete my home folder.

I didn't assume that this should be a big deal. Just restore my home folder from a Time Machine backup - the only work I had done since the last backup was already pushed to a remote git repository.

Well, restoring my home folder from a Time Machine backup resulted in an error code, so I created a new administrative user, logged in as that user and tried again.

Still error messages, so I opened a terminal, and got the message that '/bin/bash' did not exist !!!

So my command apparently destroyed essential system software. How should that be possible when I wasnt sudo'ing anything?

So my next plan was to recover the computer from said Time Machine backup. So I held the alt key pressed during startup (where the background is now black, instead of the usual light grey), I select the Recovery partition. And then nothing happens.

Booting normally into OSX doesn't work either. I get the normal boot progress bar (but with a black background instead of a grey) - but it freezes about 1/3 way in.

How do I get to a point where I can recover from my Time Machine backup.

Is it just trying to download software from Apple? Do I just have to be patient?