I got it working this morning... I'm a happy camper. I deleted everything off phtdta, I reformatted phtsys, I copied the system files from the download site. I fired up P Music M by mistake, It reinstalled the firmware (again). I created one more playlist. Then I deleted the forceupdate. Now I have music.
Thanks for the help!
Now I just need to get AAC going, I hope this is just a matter of copying the plugins....