It should be no problem bringing back the dead Defy to life again. As this is the case of soft bricked where you definitely will find a solution for it.
As the above problem, a few try might just sufficient to boot back the Defy.
1) Try boot into stock recovery and do wipe/reset.
2) Reflash again the Defy to any 2.3 files as some file might got corrupted during the downloading.
3) Use another PC to flash as some PC having driver error or corrupted driver.
4) Use another version of Rsdlite to flash.
Defy MB526: Multitouch Custom CM10 - 4.1.2
: Rooted : 2nd-boot : Overclock 1100Ghz: 720P Recorder :
Transformer TF101(B60): JB 4.2.2 (B175)
Custom kernel : Kat Kernel 96 Lidpatch
System Speed: Overclock Dual Core 1400Ghz