I have the same problem than you. I'm from Spain and I have recently bougth an iriver Story HD Wi-Fi in the U.S. via eBay because this is the e-reader with the best screen resolution and it's not on sale in my country. But the device automatically found a firmware update that was no correct, and now my iriver is frozen exactly like you explain here. And I don't know what to do. Will iriver fix this problem with no charge? How much will it cost to me if warranty don't cover this issue?
It would be nice if were possible to install a new firmware from the SD card, but it is not possible, is it true?