iTunes can't connect to update server! I've tried everything!

My son just got this iPod a few days ago for his birthday. When he went to update the softwear on the iPod itself it showed the connect to iTunes screen because it is recovery mode for some reason. When connecting it, the update downloaded but after extracting the softwear, it would say it can't connect to the iTunes softwear server so this iPod can't be restored. I have tried all the possible solutions and don't know what to do. I uninstalled iTunes and reinstalled it. I have turned off the firewall and restarted the computer. Resetting the iPod does nothing. I'm at my wit's end! My poor son has been without his new iPod for two days. I also have windows 8 if that matters. The same thing happens when I connect my iPhone 4, but my phone isn't in recovery mode.

Oh, this is an iPod Touch 4th generation. It was brand new.

Thanks!