The problem:

The user upgrades their 2G iPhone to latest version of the firmware via iTunes and this doesn’t go well 1. either they were using jail broken firmware in the past or 2. something just gets screwed up, hey it’s technology and stuff happens… you can tell the upgrade has failed because the only thing displaying on your iPhone start screen is the USB connect symbol, grrrr!

The solution: (Windows only)

These are the steps that worked for me on three separate “broken” iPhones from different users, so it’s my assumption that these are a pretty good start to restoring a jail broken 2G iPhone to the 3.0 firmware.

1. (possibly the hardest part) Downgrade your iTunes software to version 7.5, note you may have to rename you iTunes library for it to work, i have a separate PC setup with iTunes 7.5 on it for this reason.

2. Connect the broken iPhone to your PC, turn off the iPhone and put it into DFU mode, ZiPhone can automate this or once connected and turned off, hold the power button for 3 secs, now hold the home button for 10secs without releasing the power button, release the power button but continue to hold the home button for 20secs.

3. Restore the 2G iPhone firmware to 1.1.4, do this by holding down the shift button and clicking restore in iTunes and browse to the 1.1.4 firmware and click ok.
Important: ignore the error message you get when iTunes is verifiing the firmware.

4. While the iPhone is still connected now open ZiPhone and click the “Do it ALL!” button, this will jail break, unlock and active your iPhone. Your iPhone should now be fully functioning again but on the 1.1.4 firmware.

5. Move your iPhone to a PC that has the latest version of iTunes or upgrade iTunes to the latest version and restore the iPhone firmware to 3.0, do this by holding down the shift button and clicking restore in iTunes and browse to the 3.0 firmware and click ok. Your iPhone now has the 3.0 firmware but is now “locked”.

6. Unlock the 3.0 firmware by using RedSnow, run the RedSnow exe and select the 3.0 firmware (same location as step 5) click next, tick Unlock and install Cydia (Cydia is optional), browse to the location for bootloaders 3.9 and 4.6, click next and follow the on screen prompts.

7. Your iPhone should now be fully restored, jail broken, unlocked and activated on the 3.0 firmware. =)