Suggest you try the downloadable recovery image to wipe and reimage and see if this resolves the issues. Then update through Windows Update. Go to https://support.microsoft.com/en-us/surfacerecoveryimage
(with a different Windows computer if yours is not working properly)
and download a recovery image for your Surface. You will need a 16GB or 32GB USB stick (also called a flash drive) formatted FAT32 (use a Windows computer). You can't use an actual external USB hard drive for this and don't use anything larger than a 32 GB USB stick. Best to purchase and use a new, previously unused USB stick for this. Use FULL format and not quick format and give the volume a name like surfboot. Unzip/extract the recovery zip to the root of the formatted USB stick.
There are full instructions and a video at https://support.microsoft.com/en-us/help/4023512/surface-creating-and-using-a-usb-recovery-drive#download but below are quick instructions.
- Make sure your Surface is turned off and plugged in, and then insert the USB recovery drive into the USB port.
- Press and hold the volume-down button while you press and release the power button.
- When the Microsoft or Surface logo appears, release the volume-down button.
- When prompted, select the language and keyboard layout you want.
- Select Troubleshoot , and then select Recover from a drive .
*If prompted for a recovery key, select Skip this drive at the bottom of the screen*.
- Note:
Be sure to select the Troubleshoot option on this screen. Don’t select the Use a device option. If you select the Use a device option, your Surface will reboot from the USB recovery drive again and the reset process will start over. - Choose either Just remove my files or Fully clean the drive.
The option to clean the drive is more secure but takes much longer. For example, if you’re recycling your Surface, you should clean the drive. If you’re keeping your Surface, you just need to remove your files. - Select Recover.
Surface restarts and displays the Surface logo while the reset process continues. This can take several minutes.
If you still have issues and can't get the Diagnostic Toolkit to run, see if this helps:
Send your Surface in for exchange/repair. An Online Walkthrough - Microsoft Community