I just tried "buying" one on their website - just to see if it said "out of stock" and it accepted the transaction - no notice about it being unavailable. You could try contacting them again and asking to speak to a supervisor - tell them that the phone is still being sold so you don't see how they can claim it is out of stock.
Having said that - flashing (or trying to) with a third-party application may have invalidated your warranty. If you're lucky, that won't be picked up on because - from your description - it sounds like that flash never really affected the phone anyway - probably because the phone was not in USB Debugging mode.
Had you done anything at all to the phone - rooting, flashing a third-party ROM etc - before the failed attempt using the SE update tool? If not and if O2 are genuinely out of stock, you have no comeback other than a refund of the price of the phone - unless both you and O2 are willing to consider a repair. If you'd done anything to invalidate the warranty, you could - in theory at least - be in trouble as far as O2 goes but that wouldn't stop you seeing if a local repair shop can take a look - it may be something they can do quickly and cheaply - might be worth considering before you shell-out for another phone.
Before that though - just confirm exactly what happens when you try using PC Companion. Does PCC show your phone as connected via USB? If so, does it say the phone is up to date or does it say an update is avialable? If it says it is up to date, have you tried running the updater again and - if so - did you get the screen asking if you want to repair the installation? If it says there is an update available, it is acknowledging that the phone did not update - which should put your mind at rest regarding the warranty. If there is any other message - perhaps saying something to the effect of your phone not being suitable for updates, that would usually indicate that the phone had been rooted or has a non-standard ROM installed.
One other thing - and it's one of the those "obvious" things to try - pull the battery and wait a few minutes before powering on. If there's any signs of life, bear in mind that the first boot-up after an update/repair can take several minutes so give it time. Also, some phones have been known to work better with rooting and flashing tools if the SD and SIM cards are removed first - might be worth a try if you want to continue trying with unofficial flashing tools.
