It sounds like your taking the obviously appropriate actions. No one I know--and I know a pretty fair number of Zoomer users--has ever reported the error "internal storage not intializing." So, having the hardware checked out seems like a prudent move.
I haven't used Intellilink extensively, and it's worked okay for me, but I don't rely on it daily, so I can't fairly compare my results with yours. I have read a few reports similar to yours in message boards. I know the folks at Intellilink to be fair and straightforward about their products, and I thought any such problems had been resolved. Your message here makes it clear that most of your difficulties seem to be related to using Intellilink.
I'll be eager to hear if the hardware folks find anything wrong with the unit.
Steve