Mine has crashed like that about 5 times since I got it Nov 20. The last time it showed that all my Kindle memory books were 'erased' and the only content I had was on the SD card. If I took out the card there was nothing in the device, including the instruction manual and howdy letter from Bezos.
Doing the paperclip trick restored everything right away. I have taped 2 paperclips on the inside of my back cover and carry another 2 paperclips in the Kindle cover. The second and third times it did it I was in a hotel and luckily the front desk was open and had paper clips.
Seems our marvelous little thingy has a mischievous streak built in and likes to show us who's Boss from time to time.
Glad your restore worked! Scary ain't it.