Can not activate iPhone 4

A coworker gave me his old iPhone 4 which has a deactivated SIM in it.
Because the SIM was deactivated we needed to use WiFi to turn off his iCloud account but... the WiFi was turned off and the WiFi setting in Settings was greyed out.
I found an Apple help page that talked about the greyed out WiFi setting and it said that that was a known problem with iOS 7.1 and to upgrade to 7.1.2.
We did that and now the phone can't get past the activation stage.
I'm thinking that this is related to Activation Lock but shouldn't it give him an option to enter his Apple ID to release the lock?
After booting it goes to the white Hello screen where it asks to enter the language and the country and then it fades to the black Connect to iTunes screen.
When we connect to iTunes it gives an unable to activate error with the code (0xe000004).
Everything I've searched says that this is a Windows error but I'm using a Mac.

I've tried DFU mode and it doesn't help.
It just causes iTunes to install 7.1.2 over again and then the cycle repeats.

Anything else I can try?
This is not a stolen phone -- we just can't get to any screen that lets him enter his iTunes password.

So I need to find an activated AT&T SIM and just use it long enough to activate the phone. Then I can swap back the deactivated SIM.
I'll give that a shot.
What's up with not being able to activate it via iTunes?

Applejuiced said:

Not sure when you plug it to iTunes does it ask you to enter the Apple ID and password?
Either way the wifi seems to be dead on that phone so if you get passed the iCloud lock you will either have to fix the internal hardware issue or use it without being able to connect to wifi.

Click to expand...

Nope, never asks for the Apple ID or the password.
I've tried on two different Windows computers, a Mac with Mavericks and one with Yosemite.
Just the error code 0x8000004.

And you really think the WiFi is broken?
It never was as far as he knew.
And there's quite a few threads about greyed out WiFi sliders being software related.
Well, fingers crossed.
Thanks