Follow this closely:
1. Disconnect the USB cable from the device, but leave the other end of the cable connected to your computer's USB port.
2. Turn off the device: Press and hold the Sleep/Wake button for a few seconds until the red slider appears, then slide the slider. Wait for the device to turn off.
3.While pressing and holding the Home button, reconnect the USB cable to the device. The device should turn on.
4. Continue holding the Home button until you see the "Connect to iTunes" screen. When this screen appears, release the Home button. iTunes should alert you that it has detected a device in recovery mode. Click OK, and then click Restore to restore the device.
Note: Data will be lost. You may have to repeat the above many times.
Restore loop (being prompted to restore again after a restore successfully completes)
Troubleshoot your USB connection. If the issue persists, out-of-date or incorrectly configured third-party security software may be causing this issue. Please follow Troubleshooting security software issues. .
Next try placing in DFU mode and then restoring.
Then try restoring on another computer.
Last, make an appointment at the Genius Bar of an Apple store.