Hi Nikodemus,
You are my hero :) You are right, weblocks is not part of the sbcl distribution. I have built a custom core image for my sbcl to load various libs, such as weblcoks. I switched back to the original core image shipped by sbcl, and everything worked! Here comes the weird part, I took out only weblcoks in my custom core image and load it again to see if that was the problem. emacs and slime loaded just fine without it. However, I decided to put weblocks back in to the image after I have successfully loaded slime, and everything else continued to work! I don't know why, but everything is working.
The only thing I can guess is that I somehow built a bad image for sbcl. However, if that's was the case sbcl shouldn't have worked on the command line using the custom image which I have tried before the "fix". Maybe it's the combination of slime + bad sbcl image? Whatever it is, thanks for everything Nikodemus.
Aaron