Ramdisk Update #1:

These recent changes to ramdisk seem to have fixed the
    exec '/system/bin/sh' failed: No such file or directory (2)
and /system seems to be mounting properly through SELinux (see wild kernel branch wild-4.3)

According to the kmsg:
    [    2.504394] EXT4-fs (mmcblk0p28): VFS: Can't find ext4 filesystem
[    2.701782] fs_mgr: Cannot mount filesystem on /dev/block/mmcblk0p28 at /devlog

Which is causing the system to automatically boot into recovery mode.