I understand the problem currently manifests itself as the inability to access the local disk, but have you had any recent issues losing access to shared storage? You may be experiencing hostd starvation from APD (i.e. unplanned loss of storage).
Here's the command to check for APD's on ESXi 4.x:
cat /var/log/messages | grep APD
-or-
cat /var/log/messages | grep -i apd
You may just need a good old fashioned reboot if all storage is clean.