Solved....Found this after much searching.
Do following with phone connected (USB) to computer:
1. Turn off your phone.
2. Turn it back on again and as soon as it vibrates press and hold the camera button.
3. Hold the button until the "connect your phone to the PC" screen comes up.
4. Once you have got the screen, do not do anything with your phone until it shuts down and restarts automatically. That can take up to 5 minutes.
It forced the re-install of the Trophy WP7 drivers and again able to connect to computer/Zune.
This fixed my phone as well... However, I was unable to power up the phone and get the correct menu while the phone was attached by USB... I did the above, but didn't plug my phone into the computer until I got the Connection iconograph on the phone (Between your step 3 & 4). It worked as advertised. (and did take around 5 minutes)
Thank you so much for posting this. I thought my phone was dying- my son's Trophy worked, while mine was being wonky.