Try the following:
1. Hack the fone with Norton Antivirus. You will find the posts about hacking.
2. Then install a custom music player.
Or
Search for flashing Nokia N8 using Pheonix. You will find the tutorials there and how to do it. Its very easy. I faced similar problems via hard reset. I failed all other methods. So, i flashed with Nokia Belle Refresh original file and now fone is working perfectly.