Hey.
I am having the same problem.
I took my phone down to my verizon store.
they took the back off my phone and said it had been wet and that is why the camera won't work.
they tried updating the software (which it free) to see it that would fix it and that didnt work...

I dont believe that is the problem but I cant figure out how to fix it...

you can tell your phone has been wet by taking the back off and looking at the little square beside the flash.
White= wet.
Black or checkered print= it has not been wet before.

I think the red screen recycling thru and not letting the phone start up is due to your contract is almost up, say within 3 weeks and you have not renewed your contract. so if you come in they will try to update your phone and contract. they downloaded a virus to your phone.