Lost my Contact Names and Months of New Entries w/ iOS 4 Update--Any Help?

Hi,
I updated to iOS4 yesterday and after it was done all my contact names were gone. The numbers were all in there, just no names. I don't use Mobile Me for my contacts.
Checking my iPhone sync settings on my Mac for some reason "sync contacts" with Address Book was no longer checked in iTunes. It looks like it was that way for some time, which is unusual as that's the method I use to backup my contacts. No idea how that got switched, as I wouldn't have changed that. Don't think MobileMe troubleshooting had me turn it off after a Calendar duplication issue. Wouldn't make sense.
Also, I don't know why the update to a new OS would make me LOSE ALL my contact names. Why would the update be designed that way and not retain everything?
Now my computer has an old contact list and I've lost months of new contacts, phone numbers, emails and contact organization. Pretty bummed. Not sure why that box wasn't checked and the phone backup system is absolutely no help at all as, by design, iTunes only saves ONE backup of your phone at a time, and after the operating system updates to iOS4, it immediately and automatically backs up the phone with the new settings, writing over the real backup with the data you might want to return to.
Restored it from backup today to see if it'd repopulate the names, but no, it went to the backup it took AFTER the iOS4 update. It even erased the new spelling of someone's name that I put into the phone last night!
Why is this upgrade process designed without more safeties in mind, Apple? Not sure how that happened but clearly grandmothers and others might have a snafu and need to go back to an earlier backup. Can't iTunes backup the last 3 or 5 versions, or just note the differences so getting back lost data is easier? Happened a few years back, an iPhone I was using that went bad, but iTunes backed up the corrupted information in its single backup so that the last few weeks of entries, etc., got lost. Any way to get wireless syncing of the phone in the future like with Time Capsule or something, indexing at least a few multiple backups by date or something?
Clearly all the names were on the phone in their entirety immediately before the update, but then poof! Anything I can do about it now? Any ideas, folks?
Thanks.

Try a hard reset right now and see if they disappear.
Hold Sleep/Wake and Home buttons for 10 seconds until you see white Apple logo on the screen. Wait for the phone to restart and see if the contacts are fixed.

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