SHA-0 was shown to be weak by a similar technique, as well as a reduced form of SHA-1 (40 rounds instead of 80, IIRC). Since such discoveries tend to promote other deiscoveries along the same lines, there is cause to be distrustful of SHA-1. Don't Panic, but be distrustful.
Basically, this is a good time to come up with a totally new hash algorithm, since most of the existing ones are based on MD4.
"There is no shame in being self-taught, only in not trying to learn in the first place." -- Atrus, Myst: The Book of D'ni.