I know everyone is saying this is cosmetic but I am unable to connect to my EMPEG via USB at all now.

What you're describing is not the "known cosmetic bug". The known cosmetic bug was one very specific error message. What would happen is the synch would be successful, but at the very end of the synch it would say "Timeout error writing player configuration" or something like that. In that particular case, it was harmless and the synch was still fine.

But if you can't connect with USB at all, it's a different thing. Go ahead and do as Rob suggested and downgrade the player and Emplode to 1.03 until the next public beta is released.