Red Dot, will not boot

I have been having problems with my Xbox 360S,4GB, manufacture date 9-04-2012. 2 weeks ago the unit required an update. After the update, all offline game history and avatars, gone. 4GB drive, not recognized, asking to be formatted. Attempted formatting, still asks to be formatted.

Spent an hour chatting with tech support trying to resolve this issue. Not a single solution. Recommended I send it in for repair.

Ended up adding a 4 gig flashdrive via USB just so I could download my Xbox Live info.

Today, another update was required. Crashed during update and locked up. Rebooted and got the Red Dot on the power button. Unplugged every cord and waited. Plugged everything back in and unit only beeps, no boot up.

Traded power supplies with another, older, Xbox, and the other xbox boots up fine. Not a power supply problem.

Spoke to Tech Support again. Still no solution. Recommended I send it in for repair at a cost of $79-$99.

This is very unnerving considering I paid $200 for the unit in the first place while it was on sale.

The research I have done shows this is a fairly common problem, yet there is no recall or a free repair offered? Is this because Microsoft knows we have invested a lot of money into our game consoles, accessories, and Xbox Live accounts? So now we are forced to pay for repairs or purchase a new Xbox?

If any others are experiencing the same issue and/or frustrations, please let me know. Perhaps we should get together and have a group discusion and include Microsoft.