iPod Touch (2G) in Recovery Mode. Won't restore.

Ok so I have a long (possibly boring) story for everyone. Keep in mind this is also some form of rant. So I leave my iPod for like 2 minutes, don't turn it off or whatever, its probably on sleep mode at this point, and I come back, it's off. So I turn it back on, and it closes again. It then restarts, apple logo, white background, closes, and restarts over and over and over again. I can't close it. I try every hold possible. I give up till I get home. So I get home and I connect my usb from my iPod to my Mac and iTunes, doesn't recognize it. Great. Meanwhile it's still restarting over and over. I try holding the two buttons a certain way, it goes into recovery mode (and the iPod finally turns off completely), and this is what I see. ( http://i41.tinypic.com/2w676eg.png) So I click on restore, and it doesn't work! This is the message that I get. "Software for this iPod is not currently available. Make sure you have the latest version of iTunes and try again."

First of all, everything is up to date, and I just updated on the latest software update. I'm thinking maybe that's what's causing all these problems, but I don't think so. I only bought this like a couple of weeks ago and it's already giving me all these problems, it's p!ssing me off. OH and I did purchase Apple Care, so if I do have to bring the iPod to the store, I think it'll be covered. I just wish to do this myself.

Is there ANY way I can fix this and bring my iPod back to normal? Any help would be much appreciated. 🙂

Message was edited by: st3phani3