Guys, I spent an entire night on this and I still can't figure this out. Can I please get some help?

Situation:
1) I have iPod 4G with iOS 5.0 installed + tethered jailbreak
2) I want to install iOS 5.0.1 + untethered jailbreak
3) From what I understand, as of 2 days ago Apple no longer signs iOS 5.0.1 so installing is suddenly became a huge pain in the b... But I do have the SHSH blobs installed so I should be able to do it right?

Software:
-Most up to date iTunes
-Windows 7
-redsn0w_win_0.9.10b6
-sn0wbreeze-v2.9.2
-TinyUmbrella

You don't need to read the below if you can just tell me how to do it. But here is what I already tried.

Method 1:
So first I tried sn0wbreeze. I created a patched IPSW with it. As far as I understand it didn't really get me into Pwned DFU mode so I was getting all kinds of crazy errors. I got my iPod out of non Pwned DFU and into Pwned DFU using redsn0w. Tried just doing a restore - didn't work.

Method 2:
So I figured I needed to use the blobs. I ran tinyumbrella. it's giving me error 1600 - with both the original IPSW and the modified one. Also it tells me it checked it, then it starts preparing for the restore, then windows sees a new driver/device but gives me that message on how it 'could have been working faster'. And then I get 1600.

Method 3:
Finally I tried stitching blobs with redsnow + using iTunes with no apple server substitution... same 1600 error..

IMPORTANT HARDWARE NOTE: my USB cable is pretty old actually. But how can I be able to transfer ANYTHING I want and it only fails here? should I buy a new USB cable and try it again with tinyumbrella? i read that someone was having 16XX issues because of the cable...

Any ideas?.. Thank you so much in advance.