IPhone in "setup new phone" mode all of a sudden

Question

Yesterday I plugged my iPhone to the charger.
Today when I took my iPhone 4, I noticed there was a gray linen background on the lock screen, there was a little round icon with an "i" above the unlock bar. I was expecting the picture of my family.
I unlocked it and was presented with a "choose a language" dialog. Hmm. So I scrolled down to Swedish, then back to English because that's the language I use on all my devices, and selected that.
I THINK I saw some cyrillic characters at the top left where the operator typically is displayed, then it changed into "No Service". That made me very wary.
Then I had to go trough the whole phone setup. Activate the phone. The phone knew none of my WiFi passwords. Luckily the last iCloud backup was from when I plugged in the phone last night, but it's still a hassle to set up everything.
I had to put in a new lock code and it kept interrupting me setting that up with other notifications. Our office exchange accoung required a lock code. Apple should have a look at this, notifications interrupting each other during setup...
But what happened? That what really buggers me! What possibly could have factory resetted the phone in the middle of the night? A bug? Have I been compromised somehow? Was it remote wiped without my knowledge? It wasn't turned off, i just pressed the home button and my iPhone had become a out-of-the-box thing with all my stuff gone! I tried to search the forums, I checked the usual Mac sites and tried to google around but I could not find anyone whith the same problem. Have I been compromised? Did my phone somehow receive a remote wipe?
The Diagnostic & Usage setting is completely empty. I had hoped that there maybe might have been logs.
Now I have to check settings because I use several itunes accounts (since I want to share photostream with my family but not imessages) and the setup process did of course not account for that. I suppose all my WiFi network passwords are gone. Or then all this stuff got restored by the iCloud backup. I can only hope. It seems my phone will be downloading apps and podcasts a few hours.
Listening status of my Podcasts is toast for sure, since that bit isn't cloud enabled yet and I haven't synced with iTunes for a few days.
This was a very unpleasent surprise
Root cause found. I'll still post this in case someone else finds himself in this perculiar situation then his google search is maybe more successful. Turns out my youngest boy apparently could not leave my phone alone. Our phones are set up to erase all data on the phone after 6 failed passcode attempts.
Since I was too cheap to purchase additional storage on iCloud I had to excluded backup of the camera roll (the pictures are on Photostream anyway) which means all videos made the past few months including of one birthday are all gone

Answer 1

It's rare, but it does happen. You could try a restore & see if that fixes the problem.
Disable auto sync when an ipod/iphone is connected under preferences in itunes.
Connect your phone, right click it in the device pane and choose backup.
When completed, right click the phone again and choose restore from the backup you just made. Disconnect your phone and see if the problem goes away. If not, it might be a hardware problem since you've stated you did a reset.
Reset: Press the sleep/wake button and home button at same time, keep pressing until the apple logo appears and then release.