I have managed to create the custom firmware using pwnage 2.0 as well as 2.0.1 and have restored my phone using it. However, my phone is stuck in an endless loop with the pwnage logo. It'll come on for 5-10 seconds, then restart and do it all over again. I have managed to put the original firmware back on, but I really want the jailbreak to work. Anyone have any suggestions? Thanks in advance.
I found a solution : I must be doing something wrong when creating the custom ipsw file because after trying a few different ones that I downloaded off PirateBay.org, i finaly found one that worked well.
I had the same problem. restored it twice to custom ipsw and after couple of days I noticed some slowness and when I reboot the iphone that's when it goes to an endless loop on boot. I will have to downgrade for now.