IPhone 4 goes into recovery mode, won't update - it's now a brick.

This morning the phone was charged up to 96% and suddenly when I pulled it out, it refuses to start-up.
Holding down the sleep/wake and home buttons also to no avail.
Connected it to a car charger and the first screen (picture of iTunes and the USB cable) appears.
Came back and connect it to iTunes and message appeared telling me the phone is in recovery mode and need to be updated.
But what's worse is that the restore doesn't even happen forcing an error 2001 message.
Called the Apple rep and even she was surprised this happens as I'm on the Mac platform.
As a result, she indicated that it's likely to be a hardware issue.
Am going down to the telco to get a one-on-one exchange.
Jesus, Apple. This is clearly a huge disappointment.
Anyone faced the same issue?
PS: going through the "unplugging all USB devices" didn't work too. Huge huge disappointment.
Message was edited by: tanmelvyn

Did you try the "reset SMC" thing? http://support.apple.com/kb/HT3964 , mentioned here http://support.apple.com/kb/TS1275 :
Error 2000-2009: (2001, 2002, 2005, 2006, 2009, and so on) If you experience this issue on a Mac, disconnect third-party devices, hubs, spare cables, displays, reset the SMC, and then try to restore. Learn how to reset the SMC. If you are using a Windows computer, remove all USB devices and spare cables other than your keyboard, mouse, and the device, restart the computer, and try to restore. If that does not resolve, try the USB issue-resolution steps and articles listed for Error 1604 above. If the issue continues, it may be related to conflicting security software.

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