@kerryls. Have you got your phone sorted out?
I had the same issue some time ago. In my case, the menu key just stopped working, and my Arc S got into Safe Mode when I rebooted and stayed in Safe Mode no matter how many times I rebooted. Also tried factory reset - no luck.
If you had the same symptoms, there might be a problem with your menu key. I fixed my Xperia Arc S by actually dismantling the phone, cleaned the bottom PCB and the back of the physical keys (back, home and menu keys), then put everything back together. The menu key was somehow stuck in "on" mode as if you're constantly / continuously pressing it.
My conclusion: Something must have gotten wedged behind the menu key as I rode home with my phone in my riding jacket's pocket, which I don't usually do except for that one time right before the problem started. (Note to self: Vented leather jacket + wind speeds in excess of 100km/h = not good for the phone)
Keep in mind that disassembling your phone may void the warranty. My warranty was already void thanks to water damage strip changing colour despite the fact that the phone never been dropped in any form of liquid / fluid.
