You are right about the SD card being separate from the HDD. They designed it so that if anything went wrong with the SD card, your music would still be safely stored on the HDD.
At this point, with the SD card not working for you, you really have nothing to lose by trying to flash it with new software. You could go ahead and order one, just for peace of mind. Either way you go, you'll still have to open the back of the unit to take the SD card out and put the other one in.
If you want to give it a try to reflash your SD card, the first thing (after taking it out of the B2) that you'll run into is that, if your computer doesn't already have a slot for a micro-SD card, you'll need an adapter that will accept the card and then plug into a USB slot. They're fairly cheap.
Then just take it slow and be sure to follow the instructions. We're here for additional help and moral support if you need it.