AIUI this is a known hardware fault. The built in NAND flash memory is probably faulty or possibly just corrupted if you are lucky.
If it is just corrupt but not faulty then you might be able to re-flash the phone but all data will be lost, assuming you can successfully connect the phone to a computer.
If the memory is faulty then it likely won't connect and the only way to fix the phone is replace the mainboard. How old is the phone? If it's out of warranty then it's likely not an economic proposition to repair. If you bought it recently from Virgin then I would go after them for a replacement or at least a warranty repair.