Ok work is done for the day so i was trying to see how i can help BigBossman. Dude i found one 'error' in the update-script but i don't think it would have messed things up. I was missing a 'ui_print("Done"):' at the end but it didn't affect two phones here or lordmange. So i added that to the code and tried it again just now and it works perfectly here so i updated the downnload. If you can not get your device working and you have to call tech support then i can get you in a better spot. I threw together a stock md7 recovery with the flash reset into a flashable zip that is working with cwm-6.0.2.8. I've tried this twice now and it works just fine. It installs stock recovery then resets flash count, reboot and Device Status is 'Normal'. Be sure to throw the stock rom on there first as you will lose cwm and root 'pure stock+0 flash count+stock recovery' I tried signing those files but am having java issues. I'll look into that when i have more time.
http://planetjupiter.com/android/?dir=&download=vmu_sg3_stock-recovery_flash_reset.zip
This issue with losing connection is very troubling and should prompt us to tread with caution while messing around. Make sure you have good nandroids. I still can not update to mg2 and i lose connection when installing any rom including stock. My only functional situation is the nandroid i saved after the virgin tech unactivated/reactivated me. I don't think he fixed the issue i think he patched the issue on his end and i will never get updates again. I'll keep trying to figure this out.