Iphone 4S frozen after recent IOS update ?

My Iphone4S was working perfectly before installing the IOS update on 03/14/14. Now it is frozen, I have no acces to restore from ITunes because the access is password protected. The guys at Apple Store said I need a new phone. The Supervisor at Apple Care, states that this is a hardware problem wich was present before, but this not affected the phone's operation, until the recent update was installed.
Since my Phone was out of warranty, I am told I have to get a new phone. My only mistake was to trust an update from Apple could be installed without damaging my IPhone. !!
Any recommendation on what to to do, besides buying a new phone ???

Oooooh, so you HAVE to have an extra computer? One for restoring and one to use to everything else?
I had this problem when updating to 4.0, 4.0.1 and 4.0.2 - only thing that got the phone going again was actually to JAILBREAK the bugger with a software download from dev.team and using that.
This can't be right!!! Apple, get it fixed or I'll stand clear of collecting my iPhone4 tomorrow, if this is how it has to be in the future. You have had several months to clear this mess up!

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