save your shsh and upgrade? my itouch is on 4.1 and ive got saved shsh for firmware I haven't been on, so 4.2b3 and 4.2.1 so it might save higher shsh? I'm not sure though. download the latest tiny umbrella and check
make sure the download file ends in ".ipsw" and save it to your desktop
2) go to iTunes; press shift + restore and choose your file
3) if it works it'll do the whole thing and you'll be restored to 4.0.1 but if it doesn't it'll get stuck at "verifying iPod restore with apple" and youll still be on 3.1.2 and jailbroken.
all firmwares have cydia if you jailbreak. to check what shsh you've got open cydia and at the top it'll say. if you don't have 4.0/4.0.1 you can't upgrade to it
okay that's good - 4.0 is identical to 4.0.1 (there's a small difference to iPhones though). no, these are the official releases of firmware from apple, unjailbroken but still vulnerable to specific exploits. 4.0 and 4.1 are jailbreakable by jailbreakme.com and 4.1 by limera1n or greenposi0n.
what you neeed to do now to prevent from losing your shsh blobs, you MUST download the latest tiny umbrella from
choose what OS you have; Mac, windows, Linux. plug your iPod into your comp and the click "save my shsh blobs" or something similar. this is off the top of my head. then you download 4.0 from
save it to your desktop, open iTunes, hold shift and press restore and then direct iTunes to your 4.0 restore file. then click okay. it'll do it's stuff, and you'll have a fully restored iPod running 4.0
remember these firmwares aren't pre-loaded with cydia, but are all jailbreakable.
for iTunes just right click on your device and click backup iPod or something similar, then that'll back your whole iPod up, photos, music, apps, app layout, settings, (wireless networks and other things).
for cydia, this app makes a list of everything you have installed through cydia, and it stores it inside the files of your iPod restore.
to do this you will need to download through cydia either APT backup or pkg backup. apt is free pkg is a dollar or two. it'll take a minute or two to do this, then you'll need to backup your iPod in iTunes for this to work anyway, do that, then restore to 4.0 by doing what i told you before, restore to this backup, it'll do it's stuff, depending on how much stuff you've got on your iPod it'll take between 30 mins and 1 and a half to install and the settings apps and music. then jailbreak using jailbreakme.com
download apt backup or pkg backup whatever one you used before then do this: go to settings, general, auto-lock and change It to never as this process takes a long time, as it is downloading and installing everything from your previous jailbreak.
STEPS:
1: download APT backup, open the app, click backup.
2: plug your iPod into iTunes, sync and backup your whole iPod, may take a while.
3: make sure your shsh blobs are saved and then restore to 4.0 ipsw
4: when that's done click sync iPod with your backup file (a screen in iTunes will pop up, it'll be easy). sycb all your data.
5: jailbreak with jailbreakme.com
6: install APT backup.
7: go to settings, general, auto-lock, chose never.
8: open APT backup and click restore. this can take a long time - took mine an hour. but I had ALOT of cydia apps.
9: then you're set to go and enjoy a freshly restored and then jailbroken itouch with all of your previous apps
Do you have a Mac or a pc?
And the cause can't be the shift+restore...I don't think it could atleast. Shift+restore is the only way to restore to older firmwares once apple has released a new one