It may indeed be hosed, but luckily SanDisk has an excellent replacement warranty. Or, if as you say it’s only a week old, your dealer will probably replace it for you quicker than going through SanDisk.
However, before you write it off you could try formatting it (which will erase all the files you have out on it), and manually updating (or re-installing) the firmware. Note that the Zip will format itself, but as you can’t access the menu, you’ll have to let Windows do it. Just don’t use the “Quick Format” option.
