I have the same problem with an iphone 4 and your not gonna be to happy about what i have to tell you.
I gives error 1 since i updated it to 5.0.1 for the first time, it was working fine before hand for almost a year and never happend annything to it, no falling, no water nothing.
i have been over this situation for more then a half year and nobody can help me.
Apple store wont do annything about it because the hardware is ok according to them.
Apple genius bar cant figure out the problem after like 3 appointments.
I replaced the WiFi module, the logic board, the battery, all the contact points and cleaned them with alcohol, replaced the flex cable on the speaker module.
The only way to boot it is with redsn0w or tinyumbrella or whatever after the error code pops up to force it into boot.
Only after that day i've updated to 5.0.1 i now have a iphone 4 with No wifi, No bluetooth, No Service. but i still have all my Imei,mac,bluetooth model numbers nothing is missing according to the phone, nothing greyed out. it only doesn't work.
I will never update annything from apple again, this is outrageous that a update can destroy hardware.
i did all i could, in a windows pc, on a mac, 4 different cables. replaced all the hardware i can think about and even the apple stores cant help me fix it.
i'm willing to do annything to solve this problem and everything is exceptable except buying a complete new iphone.
please apple, read this and help me!! this is not how you tread your customers, and the last 2 topics i openend here where deleted.
i have for about 6.000-7.000 worth of apple products and i'm thinking of never buying annything from you again untill you get back the customer service you guys came so excellent in !!!!!!!