First, are you using the right iTunes version? 10.5 beta 7+
Second, are you using the right GM file for your device? Each has its own, even CDMA vs. GSM phones.
Third, if you ever JB'd before, your hosts file may have been changed to point gs.apple.com to Cydia's servers to enable you to restore to an older firmware. If that's the case, then you need to comment that line out of your hosts file.