I resolved my problem. This is how I did it.
Go to ISPW website and download software for your Version Apple TV. The software will open iTunes. There are several Apple TV softwares available on this site. Choose the correct software for your Apple TV. If it is the wrong software, it will interrupt the process. I chose the software listed and it worked. AppleTV3,2_8.4.3_12H885_Restore.ipsw.
Before you disconnect your Apple TV from your TV, turn your Apple TV ‘Automatic Software Update’ to ‘OFF’ or ‘No’.
Connect Apple TV 3rd generation to Mac or (windows with ITUNES). (You will need a micro USB to USB data cable for this connection. Make sure it is a data cable.)
Connect Apple TV to power to electrical outlet.
When prompted to ‘RESTORE‘, press and hold the ‘OPTION’ Key on the ‘Mac’ keyboard while you press ‘RESTORE’. You will see the file you downloaded. Select file to start the restore process. Do not interrupt the ‘RESTORE’ process.
You will be prompted to disconnect Apple TV when the ‘RESTORE‘ process is completed.
Go to your TV and connect the Apple TV and follow the prompts on the TV screen. You will be prompted to update to the latest version of Apple TV software. “DO NOT CHOOSE UPDATE!” (Or you will have to do this process again.)