From what I understand, all one needs to do to change firmware is drag the desired version to the root of the directory after it is expanded from its zip file.
Tried this too and when I drag it to the root using windows 7, it renames the file to somthing strange.
I have not yet formated the device by using win 7, will wait until any other replies.
There are other strange behaviors that I’m still working through.
If you can get to Settings/System Settings/USB try both MSC and MTP connections. One might work–the one you were using may have gotten switched during the update.
Otherwise, nuke it.
Try formatting the unit from its own Format command, under Settings/System settings. It looks like you’ve already tried that, though.
In Settings/System Settings go to USB Mode and make it MSC. Then connect to Windows and format the unit to FAT32 if that’s not what comes up automatically.