After some research, I have realized that there was some problems with plugins that were installed onto the MT system we are using. So in turn I had deactivated all of the plugins, and there was no problem. Then we had re-activated the plugins - all the while there was no issues. After deactivating and reactivating individual plugins, all of a sudden we were greeted with this message:
Status: 200
Pragma: no-cache
Content-Type: text/html; charset=UTF-8
And MT will only display the login page with this at the head. We have been working on a site with over 14000 articles and are now at a loss of what to do?
Q1: Is is possible for a Plug-In to rewrite the mt-config.cgi file?
Q2: Any ideas what could be causing the error and total system lockout?
Reported on Movable Type 5

Hey ChiGfx,
just read your post when browsing here. I probably can't help you solving this, but here's what I'd check for. It looks like this is not necessarily a MT error but could be a web server error. Only the http headers seem to be transferred. Have you had a look at the web server's error logs?
Yours,
- Ben