I have the same problem. My very first USB flash drive that I got, a 4 GB Lexar Firefly, died on me one night, though you won't believe how.
That night, I was backing up all of my old USBs that I found in a basket, which was well sheltered from heat, moisture and light. I took them all out and thought to myself, "gee, it would REALLY suck if any of these USBs died on me. Who knows what I have on them?" So one by one, I plugged them into my laptop and backed them all up. When I got to the last USB, my Lexar Firefly, I inserted it and browsed it for a few seconds. Holy shit, all these old folders of music and homework from 6-7 years ago! Good times... I back out, hit copy, then paste onto my Desktop. After a few seconds it tells me to insert it. So I'm like "wtf? It's already in!" So I try opening it. It was empty. I eject it, wait for it to say it's safe to remove, and then remove it. When I reinserted it, it said there was an error reading it. After trying a bit more, eventuallly it just stopped showing up.
How ironic is it for my USB to die on me when I intended to back it up to PREVENT such a thing from causing me any trouble in the first place?
Is there any fix for a physically dead USB? I refuse to pay $30 to someone else to fix it for me.