That sucks, have you let anyone on your account or anything? Stupid question I know.
Or do you think it's a bug?
no just little old me. i'm kinda hoping it's a bug, it appears from my searching that a few other people have been affected in similar ways - been half way through, experienced connection problems had to restart and when they've come back all their stuff has gone. plus there's others who have missing char gear but stuff in their inventory. and what with the achievements bug again (which had also been wiped from my char) who knows...
But (and it's a big but) when i logged back in i was at the start of act 1 normal and i'd left him in Nightmare just before heading out to confront the witch, and i had 2 ingredients of the staff of herding left in my inventory and that was it. logic would suggest that everything would have gone if it was bugged.
but i can't get back in again atm (error 37 and battle.net down for maintenance) so maybe when it all smoothes out i'll be back to normal! (here's hoping....)