Im sorry that you all are going through this - but Im happy to hear that its not just me. Im having the same problem, and my Volvo dealer thinks im a crazy person. 2011 S40, iPod touch. upgraded the software when my car was being serviced. Go to plug is back in, and i get "USB Unreadable".
I can use an aux cable, but the sound isnt as good and i cant control it through the stereo or the steering wheel controls.
helo!