sorry to hear about your dilemma. It's really frustrating. I've just sent my camera off again. I've tried numerous times to reset through power off/battery removal/etc without success, so I'll leave it to the experts. It's still covered by the Product Protection so hopefully they will resolve this issue. I cannot say how glad I am for taking out that $75 protection plan when I bought the camcorder from Sears. Going through this, I will definately extend this plan and/or take out another policy when I get a new one. It proved to save in the long run.
One huge concern about all this is that the format of the tapes this unit uses is not compatible with many, if not at all, of the new models on the market today. I've bought a DVD recorder from Radioshack and already burned last weeks' trip to Disney on DVD(used my in-laws' camcorder for the trip). As soon as the other comes back, I'll be transferring my entire archive(about 40 tapes) to DVD. If you haven't already, anyone reading this may want to do the same.