IOS issue 4005 error Iphone 5 HELP!!

Question

I have had my phone a while and its been working great.  I was using the phone in IOS7 and again no issues.  I have updated to IOS 8 and now it keeps telling me to connect to Itunes and when I do I get an error message with code 4005.
I took the phone to an apple guru and the respose was an absolute joke.  They are trying to tell me that (even tho the phone worked perfectly before the update) the IOS update has detected a hardware fault and will not restart.  They are then saying i need to pay them £200 to get a new Iphone 5!!!!!  Sorry Apple send an update which they recommend you do and then it renders your phone useless, then I have to shell out £200 to get a new phone!!!!
Can anyone help me with this error message and how to fix it cause Apple and their staff have been useless!!  Dont think i will be staying with Apple come updgrade time.  Total Joke.

Answer 1

thanks for the suggestions, i tried the ideas you suggested but i dont even get a camera showing for the rear camera, i also noticed the torchlight no longer works.  i did all the steps but no luck.
So I took my camera to the genius bar this weekend as well as walking through various steps with the apple guys in ohio support over the net. 
With the guys at the genius bar, after i insisted that it must be software as the rear camera stopped working only after the softwre update, they continued to assure me it was hardware and talked me into letting them replace the camera,  they then took it to the back and tried fixing a camera and 30 minutes later came out and said the rear camera is no longer being detected and wanted me to replace the motherboard for yet more money.  im glad they didnt charge me for the new camera though as it still didnt work.
anyway the motherboard idea i rejected as it was just 2 months out of warranty and had only stopped working the day after the release of 7.0.2, so im going to wait until the next few releases to see what happens, as i dont believe for a second its hardware.  i expected a stock answer from apple and its exactly what i got even after my explanation of how it was working the day before the release.  not overly impressed with the whole process.
i wanted to back down to 7.0.1 to confirm the camera still works but they said no chance so i cant even see if it still works ouside 7.0.2.  anyway will update if i get any further progress.