My 401k was reduced to a current value of just under $700.00. (due to the resession)
I have never contributed to this 401k, my employer set it up 3 years ago. The investment company states that my chances of reaching a decent retirement goal is now 5%. Do I just ignore my 401k? My work hours have been cut and I can't afford to put anything into it. What do I do ?

I would leave it alone for now, and try and get to a point where you can start contributing something to the plan - maybe just 1% of your pay to start. If your employer makes a matching contribution it would be a shame to not take advantage of it.