Not sure if anybody has had this experience yet. Thought I would spell it out for a few people who dont want to scour the internet looking for related posts.

***This does require Cydia maintaining a copy of your SHSH info

1. I had upgraded my iphone to 3.1.3 and then later upgraded to vanilla 4 from apple as a result of the custom firmware giving me ******** 160X errors.

2. I modified the hosts file to add Cydias servers to my hosts file (The main ***** with the firmware in previous versions is that it contacts apples servers for a hash check which explains the 1015 errors you may be receiving). This is one of the main reasons why its necessary to have the Cydia SHSH info on file. Cydia spits back the proper hash based on your data.

3. At this point I was still not able to load the custom firmware from the .ipsw file I downloaded. So I downgraded to 3.1.2 vanilla and then used blackra1n to jailbreak it. It also prompted me to update my carrier settings which I did.

4. From this point I was able to run the custom ipsw from a simple recovery mode (shift-click in itunes) and then selected the custom file. Almost immediately the pineapple showed up. From this point it was smooth sailing.

Hope this helps people out... I spent all day jogging around that ******** and now I am done-zo.