Thanks. I think I have it now. I tried everything on windows with no luck but I brought the ATV down to my wifi router and plugged it in with an ethernet and mixed it with the helpless apple suggestions from the support page and it seems to be entering recovery mode into my mac.
For anyone reading this who encounters the same problem, completly unplug the ATV from everything, hook it up to your computer by USB, then by Ethernet to your Router / Airport, open itunes and then put in the power cable.
Thanks to everyone for their suggestions!! Hopefully I can get on with enjoying the new update now!!