Ubuntu Budgie stuck on login screen

I installed Ubuntu Budgie 18.04 last week and things have been working great so far. However, last night the Software package installed some updates and today my computer is stuck in the login screen - I type my password and it returns to the same screen.

This is likely a very similar issue to that described here or here, but I cannot solve it since I cannot access the terminal from the login screen. Ctrl+Alt+F1 to F6 only show a black screen.

The only way to access my files is using a Ubuntu live CD and mounting my hard drive. Inspecting my files, it seems that this is a problem about permissions; cat .xsession-errors shows:

cat: .xsession-errors: Permission denied

And the permissions seem all weird.

ubuntu-budgie@ubuntu-budgie:/mnt/sda2/home/fco$ ls -lA
total 292
drwxrwxr-x  3 1000 1000  4096 Jan 30 06:57 .AMD
-rw-------  1 1000 1000  5728 Feb  5 17:27 .ICEauthority
drwxrwxr-x  3 1000 1000  4096 Jan 25 18:06 .R
-rw-rw-r--  1 1000 1000    93 Jan 25 19:19 .Rhistory
-rw-------  1 1000 1000    51 Feb  5 17:27 .Xauthority
-rw-------  1 1000 1000   254 Jan 25 18:15 .bash_history
-rw-r--r--  1 1000 1000   220 Jan 25 10:15 .bash_logout
-rw-r--r--  1 1000 1000  3901 Jan 27 01:25 .bashrc
drwx------ 22 1000 1000  4096 Feb  4 19:36 .cache
drwxr-xr-x 30 1000 1000  4096 Jan 30 19:51 .config
drwx------  3 1000 1000  4096 Jan 26 23:24 .dbus
-rw-r--r--  1 1000 1000    33 Jan 25 10:20 .dmrc
drwx------  5 1000 1000  4096 Feb  4 07:30 .gconf
-rw-rw-r--  1 1000 1000    35 Jan 30 20:22 .gitconfig
drwx------  3 1000 1000  4096 Jan 25 10:20 .gnupg
drwxr-xr-x  5 1000 1000  4096 Jan 27 00:24 .ipython
drwxr-xr-x  2 1000 1000  4096 Jan 27 01:25 .jupyter
drwxrwxr-x  4 1000 1000  4096 Jan 26 23:26 .kingsoft
drwxrwxr-x  7 1000 1000  4096 Jan 27 01:21 .local
drwxr-xr-x 11 1000 1000  4096 Jan 25 18:14 .oh-my-zsh
drwxr-xr-x  3 1000 1000  4096 Feb  4 19:33 .paradoxinteractive
drwx------  3 1000 1000  4096 Jan 25 10:24 .pki
-rw-r--r--  1 1000 1000   807 Jan 25 10:15 .profile
-rw-------  1 1000 1000  3919 Jan 28 02:44 .psql_history
-rw-------  1 1000 1000   256 Jan 25 22:11 .pulse-cookie
-rw-------  1 1000 1000    45 Jan 27 00:50 .python_history
drwxrwxr-x 18 1000 1000  4096 Feb  5 05:19 .rstudio-desktop
drwxrwxr-x  2 1000 1000  4096 Feb  5 02:15 .steam
lrwxrwxrwx  1 1000 1000    28 Feb  5 02:15 .steampath -> /home/fco/.steam/sdk32/steam
lrwxrwxrwx  1 1000 1000    26 Feb  5 02:15 .steampid -> /home/fco/.steam/steam.pid
-rw-r--r--  1 1000 1000     0 Jan 25 16:53 .sudo_as_admin_successful
-rw-r--r--  1 1000 1000   211 Jan 25 18:27 .wget-hsts
-rw-------  1 1000 1000  4097 Feb  5 17:27 .xsession-errors
-rw-------  1 1000 1000  4097 Feb  5 17:27 .xsession-errors.old
-rw-rw-r--  1 1000 1000 42702 Jan 30 17:53 .zcompdump
-rw-rw-r--  1 1000 1000 42702 Jan 30 17:53 .zcompdump-ankara-5.4.2
-rw-------  1 1000 1000 14216 Feb  5 01:39 .zsh_history
-rw-r--r--  1 1000 1000  3414 Jan 27 01:36 .zshrc
drwxr-xr-x  2 1000 1000  4096 Jan 28 17:40 Desktop
drwxr-xr-x  2 1000 1000  4096 Jan 25 10:20 Documents
drwxr-xr-x  2 1000 1000  4096 Feb  4 17:00 Downloads
drwxr-xr-x  2 1000 1000  4096 Jan 25 10:20 Music
drwxr-xr-x 37 1000 1000  4096 Jan 26 18:03 OneDrive
drwxr-xr-x  2 1000 1000  4096 Jan 25 10:20 Pictures
drwxr-xr-x  2 1000 1000  4096 Jan 25 10:20 Public
drwxrwxr-x  3 1000 1000  4096 Jan 25 17:40 R
drwxr-xr-x  2 1000 1000  4096 Jan 26 23:25 Templates
drwxr-xr-x  2 1000 1000  4096 Jan 25 10:20 Videos
drwxr-xr-x  5 1000 1000  4096 Jan 25 18:36 onedrive
drwxr-xr-x  6 1000 1000  4096 Jan 26 21:05 snap

EDIT: I was able to get into the command line using recovery mode, and there the permissions look normal. It shows my correct user name... so perhaps that is not the issue.

I deleted .Xauthority, but that did not help. I also tried to change permissions, but I get the error message chown: invalid user: ‘fco:fco’

I'm not an expert in this stuff, so I'm probably missing something basic. Can anyone help me on this? Am I correct in assuming that the issue occurs with the permissions?