You may already know the information below. If so, I apologize for duplication. If not, perhaps it will help. I hope so, I understand the frustration of not getting the &^%$! thing working, only too well!
One thought I had was that when you "re-set" your camera to default, there are some settings that are not reset. Perhaps a D7000 user may be able to offer better advice. If not, I would not hesitate to contact Nikon.
Information you may already have tried or are aware of:
If you have not already done so, I would recommend you download the D7000 Manual to your computer. You can then put a shortcut on your desktop, to refer to it when you need to, or to study it to learn more about your camera.
I like to look at the manual on the computer screen, rather than read a book about it.
Here is the URL for the download:
http://www.nikonusa.com/pdf/manuals/noprint/D7000_ENnoprint.pdf
Information about protecting files on your camera are on page 174. Just type the number into the space provided in the PDF Manual page, and hit enter, and you will be whizzed there.
(The manual does mention a specific way to "un-protect" the files.)
The following pertain to ViewNX2 Software: (Found in the ViewNX2 help files)
You can protect a file so that it will not be deleted erroneously or its XMP/IPTC information, etc. will not be changed.
Once you protect a file, you will not be able to perform operations such as metadata editing, image adjustment or deletion on the file using ViewNX 2. As for Smart Photo Selector images, if they are represented by the key image with selected, all images in the group will be protected. If they are individually displayed with selected, you can protect them one by one.
Select an image to protect, locate the cursor on [Protect Files] from the [File] menu, and select [Protect].
The image is protected, and is shown on the thumbnail.
To unprotect
Locate the cursor on [Protect Files] from the [File] menu, and select [Unprotect].
The file is unprotected, and is cleared from the thumbnail. As for Smart Photo Selector images, if they are represented by the key image with selected, all images in the group will be unprotected. If they are individually displayed with selected, you can unprotect them one by one.
Protect icon
This icon is not shown if you set the thumbnail view size to [Minimum] or [Smaller].
Notes
If you attempt to delete a folder containing a protected file, you are prompted to confirm the folder deletion. When you respond with [OK], the folder is moved to the "Recycle Bin" (or "Trash" in Mac OS).
Files protected on your camera will be continuously protected in ViewNX 2.