Yesterday Apple released an Thunderbolt Update 1.2 which adds gigabit ethernet functionality to the Thunderbolt port.  Unfortunately this update does not work on many MacBook Pro and iMac machines causing a kernel panic and preventing the machine from booting.   Issue affects newer 2011 iMac and Macbook Pro models that have the thunderbolt / display port.
One fix is to boot the machine to the recovery partition and reinstall OS X Lion.  This procedure can be done by rebooting and then holding down the option key as soon as you see the grey screen.  In the menu  that appears choose Recovery Partition and then choose to install Mac OS X Lion when prompted.  This will not delete your personal information, it will only reinstall the OS.  Problem with this method is time, process can take 90-180 minutes.  When finished do not run the updates from Apple, until Apple fixes the issue.
Second quicker method to fix is to use a second machine.  Boot the affected non-booting machine into target mode (Hold Down T as soon as you see grey screen) and connect to a working mac via firewire.  Download the OS X Lion update 10.7.4 (Client Combo) and then run the installer.  Instead of choosing your Hard Disk for the installation location choose the Firewire icon drive and install the update to this drive .  When finished simply reboot the down machine and it will boot normally,  just make sure not to re-run the Thunderbolt update once you are back up and running.
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