I got almost all my news from Digg for the past 3 years. Watching Digg self implode like this is somewhat sad to see. It is fascinating, and scary how fast it happened. And I think Digg is in pretty serious trouble here regardless of what steps they take now, or whether they deserved it. The userbase seems intent on kicking them into the ground now.

I think their primary mistake was tying an infrastructure change with a complete recoding of the site. It appears they didn't even had a backup plan of going back to the old site in case "something" didn't go as planned.