IPod dead after carrying out RECOMMENDED security update!  Any ideas?

At the beginning of December 2006, I installed the most up to date version of iTunes when prompted to do so. I was then informed by iTunes that my iPod required a security update and so I downloaded this update. My iPod (5th Generation model) seemed to freeze half way through the process. It keeps attempting to load and then crashing when I try to switch it on. The iPod is now no longer being recognised at all by My Computer. I tried all of the recommended troubleshooting steps and advice with no success.
My iPod now doesn’t even turn on properly and given that the PC doesn’t recognise there is a device attached to it, we cannot take any of the troubleshooting steps to fix it.
If changes had been made to the PC, these may have caused the problem and I could have looked at some troubleshooting solutions such as tweaking with the PC registry, updates of drivers etc. However, it is clearly not a PC issue as I have tried to plug the iPod in to three PC’s with no success. The iPod hard drive no longer starts so I'm 99.9% certain it is an issue with the iPod hard drive – the security update has essentially scrambled/killed the iPod hard drive and it seems to need to be completely reset. I have tried the '5 R's' and that did not work. I also managed to get the iPod into diagnostics mode and it says it has issues!
I have had absolutely no problems whatsoever with my iPod prior to attempting this security update (which was recommended by Apple). The iPod has therefore mal-functioned through no fault of my own – if I hadn’t been prompted to download this security update, I have no doubts that it would still be in good working order.
Any ideas!!
PS - this essential security update and subsequent death of my Ipod occurred exactly one day after my 1 year warranty expired!! Call me a cynic but do I smell a rat?
5th Generation iPod Video 30GB   Windows XP  

My problem started after downloading 3.1.2. It gave an error message that said it could not install the program due to an error. It gave me the option of sending the error message to Apple. I declined. My ipod now only displays a screen that shows a usb cable being plugged into itunes. The computer will not read it and it will not sync. My ipod is basically dead. Ive tried all of the fixes to restart it but have had no success. Holding down the power and home button did not work. I held it for nearly 20 seconds. The power will shut off then the apple will appear. Then the usb cable appears again. I purchased my ipod on 10-1-09. Im going to take it back for an exchange.

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