had that very same problem ! but i was able to fix it
you will need-
iphone versons 1.0.2, 1.1.1 ,1.1.2 (download from mmi downloads)
ibricka
i used a pc (not mac)
step 1 get itunes 7.4 or later running
step 2 connect iphone to pc
step 3 hold down the power and home button may take some time when screen goes black release power button but keep holding the home button untill itunes picks it up in recovery mode
step 4 (you must have all the firmwares downloaded to your desktop b4 proceeding) itunes will tell you that you need to recover your iphones firmware . in itunes hold down your shift key and click on restore. a dialog will appear select firmware version 1.1.2 and restore.
step 5 after that you will have to downgrede firmware and baseband using this guide
http://www.modmyi.com/forums/showthread.php?t=15310
only thing i done differently in the guide above was i used ibricka to downgrade from 1.1.1 to 1.0.2 it make it a bit easya and when itunes said that it did not downgrage open ibricka and it will say boot iphone
it work like a dream and i waz shittin myslef and my iphone was 1.1.1 firmware otb
let me know how it went ! or if you have any questions?
open ibricka and chick on boot iphone
edit didint wont the money just a thanks would be nice!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!
because i know wot it feels like