Sounds like your device may be on the way out. :( That error happens when the software can't communicate properly with your Zune. Might be time for new device. I hate to throw things out, but you might be better off just getting a new device on eBay or something, as repairs can sometimes cost just as much as a replacement.
Matt Akers
Zune Product Team
.: This posting is provided "as-is" with no warranties, and confers no rights :.