The phone gets stuck on boot loop but I can force it to show the error we are talking about by going in to recovery mode and wiping the cache and factory resetting. Otherwise it just boot loops forever.
I have seen a few threads of similar issues, but they are all unresolved or their error is slightly different. In my case it is a
"(No such file or directory)
E:copy_dbdata_media:Can't mount SDCARD:"
I read somewhere it is possible to use an external card to run the phone whilst you nuke the internal memory and reset tables etc before flashing some stock ROM again. I have a spare mSD already formatted as per this video (he uses an 8GB partitioned 6GB fat32 and 2GB reiser, I simply have double both since I am using a 16GB card), but now I am unsure of what to do exactly. I can't do anything with the phone itself, so I am stuck using download mode or the standard android recovery mode (no CWM).