Erase userdata and reboot using fastboot.
Resort to this method if you are ok loosing your data.
Installing Fastboot on your Desktop/Laptop .
Fastboot comes with android-sdk for windows. (make sure fastboot is installed)
Boot your phone in fastboot mode
Its generally done this way,
press down volume key then power on button and hold them for 6-7 secs. You will see the notification light after which release the power on button and then the volume down key.
wait for 3-4 secs. Fastboot screen will appear on the phone.
Connect it to your host (via usb) and install the drivers.
Install fastboot drivers for your phone.
Open device manager in windows , you ll see something like 'fastboot condor'.
rightclick->properties->(select Hardware Ids in details tab)
you ll see something like
add the following lines in your android_winusb.inf based on the hardware IDs (android-sdk-windows\usb_driver_r03-windows\android_winusb.inf)
- %SingleAdbInterface% = USB_Install, USB\VID_22B8&PID_2E80
- %CompositeAdbInterface% = USB_Install, USB\VID_22B8&PID_2E80&REV_0100
update your drivers from android-sdk-windows\usb_driver_r03-windows\
check if your device is detected using the command
in windows cmd
Erase user data
fastboot erase userdata
Reboot your phone
PS: I had a far worse problem. The phone just got stuck (in an infinite loop) with a dialog.