Maybe you just got a lemon. At this point I’d suggest a replacement or a phonecall with tech support.
Some other thoughts:
Are your new mp3s properly tagged? Have you gone down the Music options to see if they are visible in Folders? If there are no tags (or ID3v2.1 tags or, I think, ID3v2.4 tags) then Artist, Album, etc. won’t be listed.
You’re right about the power-center-menu offering the option to clear the firmware. Had no idea.
I have to wonder if doing that has contributed to your problems, since the firmware is the operating system for the unit, but you’ve said you were still getting the menus, settings, etc., so there must have been backup firmware on there.
One other thing you might try is a non-Windows 7 computer, preferably XP, which doesn’t have a lot of the security obstacles of Vista and WIn7. Put it in MSC, see if it connects, and if miraculously it does, drag over a new firmware, unzipped from this thread using the Manual instructions:
http://forums.sandisk.com/t5/Sansa-Clip-Sansa-Clip/Sansa-Clip-Firmware-Update-01-02-18/td-p/280756
