This really sucks! LG should provide better tools.
I wanted to update to Gingerbread, and I said to myself: this is the official app from LG - it should work. And surprise! it didn't. If I didn't read this thread I would've been stuck with a bricked phone. Thanks for pointing out Smartflash. The phone came back from the dead.
Now, don't try to do what I did. I retried upgrading the phone software in the hope I could get Gingerbread. I tried twice - first time Smartflash worked fine, second time I almost lost hope. It kept giving me timeout errors, but worked in the end after many attempts. So if you manage to revive it, leave it like that!
I'm still not happy about not being able to update to Gingerbread (V20l I thinks the firmware should be). Does anybody know a safe way of doing it? (I don't think I'm touching Smartflash ever again, even though it did rescue me this time.)