cannot restore ipod 4th gen without updating to ios 4.2 and cannot do that

My son cannot remember his passcode to his new ipod touch 4th generation. I go into itunes to do a "RESTORE" and it won't restore unless I update to the new ios 4.2 software. When I try to update, I get the "network connection timed out" error. It will never update. I have disabled every bit of security on the computer, removed and uninstalled all anti-virus software, removed firewalls from windows and the router, unplugged and replugged in the modem and the router to do a hard reset, tried creating a new user account in Windows to see if that helped and it gave the same error. I was told by Apple that I must not be able to do it for some reason and I have to go to an Apple store to have it done. That is ridiculous that they can't even figure it out. My son just wants his ipod restored so he can use it and I just want to be able to do updates.