To the OP:
I think the simple truth is that we don't have enough information from this to give you an idea. We don't know your courseload and even if we did, we don't go to your school, so we don't know how hard it is anyways. With that said...
The short answer is, no, you are not definitely screwed. It's certainly not good that you had these troubles earlier in life, but it will not necessarily keep you out of medical school. If being a doctor is important to you, I would not let this stop you, it is surpassable. Work as hard as you can. Take the most interesting classes that you can find and do as well in them as you can. Besides the required pre-med classes, don't take courses just because you think they'd be good for medical school applications. It's much more rewarding to take classes you'd enjoy and you'll have a much easier time in interviews if you can discuss something that was interesting to you, regardless of if it was Russian literature or basic science.
Study hard for your MCAT, it will matter even more for you that it would for other people. The same applies to extra-curriculars. If you can volunteer at a local hospital, do so. Shadowing is always a plus, as is research. Basically, stay interested and stay involved. In addition, your plan move to a university is a good one, regardless of the direction you want to take.
Now, my advice aside, there is one thing I'd like to clarify because I think some of the folks on this board have it wrong. It seems to me that your failing grades were in pre-business classes. I may be wrong, as I don't have your transcript, but I think this is likely the case. AMCAS and medical schools calculate two separate GPAs, a total GPA and a BGEN (basically math and science) GPA. The latter matters much, much more in applications. It's possible that your BGEN GPA may still be rather high, if your failing courses are in different subjects. This said, you are still going to have to explain why the difference between your two GPAs occurred and how you've made changes to prevent this from happening again. So, it's possible these bad grades haven't hurt you as much as you think. I'm not saying you're sitting in the clear, but it probably isn't the end of the world.
You've got a long, long road ahead of you and there are many things that could happen to you that would hurt or improve your chances beyond what you speak about here. I had a somewhat similar (though not as acute) situation in college and I took some time in my AMCAS (not all of it!) to explain my situation, what happened and how I changed things for the better. Med schools are worried about burn-out, this is true, but they are mostly worried about burn-out from students that did four years of college right after high school and then went straight to med school. Kids who may not have never been seriously scholastically challenged and find that they don't enjoy working this hard. If you can demonstrate that you have been tested, broken, fixed yourself and returned to your studies with a fervor that accompanies one who has looked hard at themselves and learned what it is to overcome this sort of adversity, I dare say you'd be in a better position then if you'd just taken a simpler path.
This doesn't mean you get a free ride though, you've still got to demonstrate (or rather demonstrate more) that you are a changed person, this is not easy, but if you're determined you can make it happen. Some medical schools will not be interested in the sort of transcript you will provide. Nothing can change that. But if you work hard and dedicate yourself to this profession your story will resonate with some.
Best of luck.
P.S. This applies to everyone. Do not go to a D.O. school just because you don't think you can get into an M.D. school. Everyone is cheapened by this. D.O. schools have a different philosophy towards medicine than M.D. schools. If their philosophy appeals to you, then by all means go for it! Just don't look at them like a second place prize, they are much more than that.