Can't restore - unknown error 1011 recovery mode

After being prompted for new iPhone firmware, I agreed to install it. The files copied over to iTunes and then I received a message that said my iPhone was in recovery mode and needed to be restored. No problem, so I chose to restore. Towards the end of the restore another error message appeared that said my iPhone cannot be restored - unknown error 1011.

I have restarted the iPhone and I have shut down and restarted the computer. I have also re-installed iTunes and tried to restore again. Nothing works and my iPhone just displays the cord to iTunes graphic.

Any ideas?