@psisarah, thanks for that... this is exactly what happened to me last year, and totally forgot. The device seems to have to be a dev device prior to doing the jump to the new development version. Your steps would be the way to go. Am about to try it myself.
Press and hold both buttons until it goes black...release only the power button after about 2 full seconds and keep holding the home button. You will know you've placed it into DFU if the screen remains black and iTunes says it's in recovery mode.