A statement from Deep Silver handed to horror site Daily Dead explained that it had done its best to avoid save files being compromised but in some instances players will lose their progress.
"We tried every avenue possible in order to avoid fans having to wipe their saved games… this update may cause incompatibilities between the incorrect version of Dead Island that was released and the fixed version and cause a wipe on saved games. "
However, it went on to offer advice on how to claw back some of your lost data.
"When the game opens, select New Game -> Select the same character as you were using before, and then there will be an option for 'Chapter Select' which will allow the player to jump to the last chapter they were playing in."
The problem initially arose when a ported development build of the game was mistakenly uploaded to Steam. The correct version is now up and ready to download.
Deep Silver is planning a good-will "make up" offer for those affected, with details expected later this week.