I recently installed some new file packages for Cygwin and now the prompt says "bash-3.2$" instead of "username@machine $". And the default directory seems to have moved to /usr/bin. For now I can no longer use some of the Unix commands nor do any development with it.
I'm only certain that a re-install is unnecessary to correct the problem. Maybe it's something in my user folder's .bash_profile that needs to be changed?
While you can easily fix the shell prompt by setting the PS1 environment variable to something like "\u@\h \w$ " your description sounds as if something else is seriously wrong.
Try rebuilding /etc/passwd by executing: mkpasswd -l > /etc/passwd
and restart the cygwin shell afterwards.
Editing the .bashrc changes the prompt, but it doesn't restore the original functionality. I still can't use some commands such as make or ls (though cd and pwd work). Thus, Cygwin cannot find the command 'mkpasswd' when I enter it in the command line.
Check that the .bashrc is in unix text format (no character 0x0D before 0x0A).
I had the file long ago in windows/dos format, and it was working, until some day suddenly after a cygwin update, it stopped to do it until i converted it to unix format.