I also had a major disaster with my Sony Reader and ended up in a similar position. Luckily, I had never installed the official Sony firmware update. When I hooked up my Reader to my Windows laptop and started the Connect software, I was able to start that process and it restored function to my device. It even preserved all my files.
If you've already updated, there is a way to trick the reader. It's briefly described in Post #13 of the following thread:
https://www.mobileread.com/forums/showthread.php?t=10902
Good luck!