Hi mac1291x,
Unfortunately, you are correct regarding external boot media. By default, external boot media is prohibited by the T2 chip. However, it can be reconfigured to accept external boot media by booting into Recovery and selecting the appropriate setting in Startup Security Utility. It's too late for that now, but still try booting from a USB installer. Perhaps you or a previous owner might have changed that setting earlier.
Have you tried connecting to a different Wi-Fi network? If you're currently on a public/hotel network or some other Wi-Fi network that requires you to sign in after you join (with a captive portal page), that won't work for Internet Recovery. Or, perhaps the Apple Recovery servers can't be reached from your network (that'd be very odd, but still possible).
If a different Wi-Fi network doesn't work, try using an Ethernet connection. You'll need a USB-C to Ethernet adapter, such as the one sold by Belkin.
If all else fails, you may need to bring your Mac in to Apple for service. Unfortunately the T2 Security Chip isn't nearly as capable as the M1 chip, and performing a DFU restore would only reinstall bridgeOS (the firmware for the T2 Security Chip). It would not reinstall macOS or macOS Recovery (unlike DFU mode on the M1 chip).
I'll post an update to this thread if I find anything on the error code that you posted.
Best of luck in getting your Mac back in working order.
EDIT: Quick question, which keys have you tried? Option-Command-R will let you reinstall the latest copy of macOS over the Internet. Shift-Option-Command-R will let you reinstall the version of macOS that shipped with your Mac from the factory. Both combinations are worth a try.