Unable to restore iPod Touch (Previous 3.1 firmware)

[kAoTiX]

I recently purchased an iPod Touch off eBay. It was damaged so I repaired the digitizer no problem.
It was already on 3.1 firmware but obviously synced to someone elses iTunes so I wanted to do a complete restore on it on 3.1.2

I plugged it into iTunes and started the restore, but the iPod wasn't doing anything and then iTunes crashed (what luck). So i restarted the process but the iPod wouldn't go directly into recovery mode (reboot loop with apple logo). I thought well forget this so I put the iPod into DFU mode and started over.
Upon attempting to restore I'm now getting the good old 1604 error message while preparing the iPod for restore.

I've literally tried everything I can think of to get it to restore but nothing is working. So far I've tried the following:

Different USB port
Different PC
Reinstalling iTunes (plus combination of the above)
Tried on my mac mini
Manual restore to a previous firmware downloaded from apple direct (2.2, 2.2.1, 3.0, 3.1.1, 3.1.2)
Usb cable is directly into the PC/Mac so no hubs involved.
Also tried iRecovery to manually write to the iPod

Can anyone else suggest anything? It's literally bricked now and I cannot believe for a second that there isn't a way to restore it as it was working perfectly fine before hand.

Any help is greatly appreciated.