Well, since you have given up and are going to make an appointment at the Genius Bar, for any other viewers with this problem, try this:
Hard Reset:
1) Power iPhone on.
2) Hold the Home and Sleep/Wake buttons for about 7 seconds, or until the screen turns black.
3) Your iPhone should reboot. If it doesn't don't worry, just hold the Sleep/Wake button for about 2 seconds.
Recovery Mode Restore:
1) Turn iPhone off by holding down the Sleep/Wake Button for about 5 seconds or until the Slide to Power Off slider appears.
2) Slide Power Off slider. If iPhone is unresponsive, follow the Hard Reset instructions up to Step 3.
3) Open iTunes on your computer (Mac or PC).
4) Hold the Home Button down while you connect your iPhone to your computer via a USB cable.
5) iTunes should prompt you with a message saying an iPhone has been detected in Recovery Mode and that you must Restore it to before it can be used with iTunes.
6) Click Ok.
7) Click Restore a message should appear confirming that you want to Restore and Update.
8) Click Restore and Update. The restore has been initiated. Leave your iPhone connected until you iPhone reboots and syncs with iTunes.
David
P.S. - I was at the Genius Bar a few days ago and saw someone with a similar, if not identical, problem. The genius was (trying to) restore it but it was stuck at the Waiting For iPhone (I think that's what it said) stage with the loading bar on the iPhone. The Genius asked if he tried a restore before and the man replied, "yes and it just stays at this forever, I even tried leaving it there for about 6 hours and nothing happened". Since the man's iPhone was out of warranty, the Genius told him he couldn't fix it. He did, however, say that it seemed like a hardware issue and he could send it into a place like
iResQ that would fix it for him. iResQ gives you an estimate on how much it will cost to fix something, when you send it in, and they will fix it if you would like them to. For somethings, like broken DIgitizers and screens, they already have how much it costs to fix it. From what I've seen they are pretty reasonable, especially for doing the labor to. You can also take the information that they give you and attempt to fix it yourself.
David