Apple said it's an issue with the board inside and it needs to be replaced as there is NO physical way to restore/update or get it out of the mode its currently stuck in.
I've dropped it off at the little asian phone repair shop HAIOU in Cannington to check out the soldering on the board etc, it will take 5 days and if they can fix it I'm up for $198 if they can't fix it then I don't pay anything.
Apple said I have to pay for shipping to and from the service centre, wait upto 4mths for repairs or board replacement and would not give me a estimate pricing on repairs except "probably 2/3 of the cost of a new phone, FARK THAT!
So I called the Vodafone Loyalty Team today and told them the detailed story and basically said I'm not too happy paying for another 8mths of monthly charges for a phone I cant use, they said they have seen this quite a few times with the iPhone and they would waive a fair chunk of my early exit fees to cancel the contract and sign me up for a new one. (which was a shitload cheaper by 80% than buying a new HTC DESIRE outright)
So I signed up for a new HTC DESIRE HD with the same plan I've currently got which is the $69 cap but was given a monthly credit of $10 each moth for 24mths which is kool, so now I'll have a new phone and pay $59mth and still get $650 calls, free unlmited calls to Vodafone and 3 phones, free unlimited text and MMS, 2GB of data + 2GB of video streaming.
I have to wait 5-7 days to get the new phone but I'm pretty chuffed with the new phone and plan I'm getting.
If the iFail can be fixed then I'll flog it off cheap and if not I'll still sell it on ebay as people buy broken shit haha.
Thanks again to everyone that tried to help but the current problem which is a hardware and board issue can't be repaired by the various suggestions given.
