After GB27: Blank USB Storage?!?

I have the same problem with the new/recent update to the OS. There is no way to reformat the USB storage that I can tell. When I go to reformat the SD card (knowing I will probably lose everything on it), it gives me a message that it's being used for mass media (duh, no kidding).

So I've now got an S2 with no usable camera and all the apps that were stored on the SD card are now unusable as well.

I'm hoping Samsung is working to fix this. Prior to this, I loved my GS2
:-\
 
Sorry, I know this was a while ago. Hopefully someone can help. When you chose the option to format SD card, did you lose everything in the card? And after was the problem fixed? Fully functioning camera again, etc??