@hiban
I'd guess that the watch is going into preboot mode when you press the up arrow. Please advice whether you mean it's seen in Windows Explorer (that's Mass Storage Mode) or if it only appears in Windows Device Manager (preboot) when you connect to PC with the up arrow held.

If it's seen in MSM then it may be very easy to recover. However it's only attaining preboot then we may be able to load cure fw to fix it so please then also post a link to the original firmware version currently loaded to it.