No, you don't have to start over!
David, the Developer, is a mean old-school dungeon master that likes to toss your character into unknown places with no equipment. But, he is kind enough to leave a way for you to escape.
After waking up in the Unknown Dungeon, there's a way to get the attention of the prisoner in the next cell who will help you escape. It's a short dungeon but can be challenging as you won't have your equipment.
You can load a previous save state (yellow folder icon on load menu) if you want to just say heck with the dungeon for now.
For more detail info, use the
Wiki link on the quest.