Just had the same thing happen to me. I was trying to start a new "advanced" world with stuff robbed from a previous one. After about 5 hours, while it was saving, it just stop responding. I force closed Valheim and started again. Day One with no gear/items but the fog on the map was gone like i had went places.

Luckily, I have many worlds so no big loss. But it is a minor annoyance.

Exact same thing happened to me. All the way through to Yagluth and about half way through an epic base build (without cheats) and now I don't know what to do with my life. Cloud save really did me over there.

You need to follow these steps EXACTLY or they won't work. It might still be that there's no recoverable world in Steam Cloud, but if there is, below are the steps on how to get it back:

1. Turn off Steam Cloud in the global Steam settings. It is not very reliable when handling bigger amounts of data.
2. You need to go here:
https://store.steampowered.com/account/remotestorage
... click on Valheim and look for your world by name. It doesn't matter if the world name is hidden in a long string of seemingly garbage. It's just important that you find it.
ADVICE: Be sure to scroll down to the end of the list if there is an indicator like ">>" then there is a next page! Click on it to check out if there is actually a newer world.
3. There should be two files you need to find.
a. One ends in .db and is the actual world.
b. One ends in .fwl and is needed as well.
You need to look at the dates in the column to the right which is the latest one. If that world is reset as well, try an older one.
4. Download both .db and .fwl file. They need to have exactly matching names!
5. You DID turn off Steam Cloud in the global Steam settings, right? If not, do it.
6. Quit Steam completely.
7. You need to go here on your PC:
Copy and paste this in the addressbar of a file explorer window.
8. There should be two folders named "characters" and "worlds" listed there. Enter the "worlds" folder.
9. The two downloaded files probably have some really weird long names. You need to rename them to just
"YOURWORLD.db" and
"YOURWORLD.fwl" respectively. (YOURWORLD is a placeholder for your actual world name.)
10. COPY these files into the "worlds" folder at the location listed above. KEEP the originals in a safe place.
11. If you already have a "worlds_local" folder at the location listed in step 7 above, MOVE it out and place it on your desktop for now.

Now you need to copy your character file from Steam's userdata folder into your local folder.
12. Go here:
... where "YOURSTEAMID" is exactly that, your (short) Steam ID.
13. Enter the "characters" folder.
14. COPY (NOT move!) your character file (should be named something like "YOURCHAR.fch") to the location listed at step 7 above and move it inside the "characters" folder.
15. If you already have a "characters_local" folder at the location listed in step 7 above, MOVE it out and place it on your desktop for now.
16. Start Steam. Start Valheim. Test.

If the world is back in working order, you are HIGHLY encouraged to start doing periodic backups of ALL your important data! Data corruption IS a thing! Computers CAN and WILL fail!

It is solely up to you to keep your stuff safe from loss. Just a friendly reminder. Please let me know if my directions helped.

Good Luck!