Here is a great description of how Alan Kay and friends wrote the Squeak (Smalltalk) VM using another (Apple) Smalltalk:
http://ftp.squeak.org/docs/OOPSLA.Squeak.html
Also consider that a bunch of languages (most?) consist of a kernel (or other VM) written in something native (like C) surrounded by a bunch of libraries written in the language itself. Off the top of my head: python, java, clojure, most schemes, etc. are like this.
For ridiculous exercises in bootstrapping minimalism, check out Ian Piumarta's work on Cola:
http://piumarta.com/software/cola/