Well this seems to work perfectly... Found this after hours and hours of hard searching...
To reload the firmware try the following steps:
1. Disconnect BB from computer
2. Install Desktop Manager 4.1
3. Install firmware package for 8700c. The latest Cingular package can be downloaded here
4. Reboot your computer if the installer programs ask you to.
5. Start a command line (cmd.exe) on your windows box
6. Change on the command line to directory C:\Program Files\Common Files\Research In Motion\AppLoader
7. Make sure Desktop Manager is not running
8. Connect BlackBerry to your computer
9. Enter the following command on the command line window loader.exe /nojvm
10. The Application Loader Wizard window will open
11. Click on Next >
12. You will get a drop down list with the COM ports and one USB port entry.
13. Select the one which says USB:UNKNOWN
14. If you do not see USB:UNKNOWN or USB:BBPIN, than you will need to disconnect the BB from your computer, but keep the Application Loader Wizard window open
15. While the BB is disconnected, open the battery door, remove the battery and put it back.
16. While the red led is on you, you need to reconnect the BB back to your computer. The led will only stay on for a few seconds.
17. Immediately when USB:UNKNOWN appears in the drop down list, you need to press on Next >
18. The loader should now connect to your BB and you will be able to reinstall the firmware.