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The following set of troubleshooting steps may be able to recover the Surface device from an automatic repair failure loop.
CAUTION: This process involves performing a push button RESET of the Surface device. All files (data) and settings will be erased as part of this process. The process will take anywhere from 10 to 30 minutes.
1. If the Surface device is currently ON, hold down the power button for 10 seconds to turn the device OFF completely.
2. Press the power button again to turn ON the Surface device.
3. Surface starts with a "Preparing Automatic Repair" under the Surface logo.
4. Then shows "Diagnosing your PC."
5. At the Automatic Repair failure screen, tap Advanced Options.
6. On the Choose an option screen, tap Troubleshoot.
7. On the Troubleshoot screen, tap Advanced options.
8. On the Advanced options screen, tap Command Prompt.
9. A command prompt is opened.
10. At the command prompt window, type the following command to delete the "SYSTEM" file and press Enter.
NOTE: The "/P" switch fo the DEL (delete) command will prompt you prior to deleting the file.
DEL C:\WINDOWS\SYSTEM32\CONFIG\SYSTEM /P
11. Answer YES to the DEL command confirmation prompt by typing a "Y" and pressing Enter.
12. If the DEL (delete) command is successful, there is no message returned at the command prompt.
NOTE: If an error message is displayed, make sure the command was entered correctly. If the error message persists, the Surface device should be serviced.
13. Close the command prompt window by either clicking on the "X" (close) button at the top right corner of the command window OR type "EXIT" in the command prompt and hit enter.
14. On the Choose an option screen, tap Troubleshoot.
15. On the Troubleshoot screen, tap Reset your PC.
16. On the Reset your PC screen, tap Next.
17. Tap Just remove my files.
18. Tap Reset to start the reset process.
REMINDER: All personal files and apps will be removed from the Surface during the reset process.
19. The reset process starts.
20. When the reset finishes, the Surface device will restart into the Windows setup wizard (OOBE) just as when the device was when the device was when first unboxed.
NOTE: If the Reset process fails again, the Surface device requires servicing.
If this does not resolve the issue I highly recommend either setting up an exchange yourself from
myservice.surface.com or contacting Surface Support
from Surface.com/support for assistance in setting up the exchange.