Just an FYI, I got this same problem today.
I had installed BUZZs kernel and was trying to sort out the wifi issue as well as get the XBox 360 controller recognised when I got this error. (I had ADB mode enabled).
Have rectified it booting into the flash mode and restarting.
Previously had 1.08 and the older MCR on so am using this as an excuse to install a fresh the latest stuff.
CURRENT DEVICES -
Nokia Lumia 520
Barnes and Noble Nook HD+
DEVICE HISTORY -
Phones (Including SmartPhones) :
Bosch 509e, Nokia 402, Nokia 702, Nokia 3210, Nokia 3310, Siemens C35i, Nokia 3330, Samsung A300, Panasonic GD75, Sony Ericsson T68i, Sony Ericsson T610, Sony Ericsson P900, Nokia 7600, Nokia N-Gage, Samsung E720, Nokia 6230, O2 XDA Mini S (HTC Wizard), T-Mobile MDA Vario 2, O2 XDA Orbit 2, LG Renoir, HTC Diamond, Blackberry 8800, HTC HD2, Sony Xperia Play, Nexus S (AMOLED), Nokia Lumia N800, Nokia Lumia 520
Casio Cassiopeia E-125, Psion Series 5, HP IPaq 2400 & HP IPaq 3715, Nokia N770 Internet Tablet, ASUS EEE PC 701, Samsung NC10, Advent Vega, Nook Color, Nexus 7, Barnes and Noble Nook HD+