Apple TV stuck in Recovery Menu

My Apple TV had been working in an almost perfect fashion for almost six months with the exception that I could only stream content from my iTunes library and couldn;t sync content with the exception of photos. I proceeded to Restore to Factory Settings and since then I've been stuck in the Apple TV Recovery Menu.
I've searched the forum endlessly for other posts and I could only find one directing me to the following instructions:
http://support.apple.com/kb/HT1560
I performed all the steps in that link (detailed below) and I'm still stuck in the Apple TV Recovery Menu.
Has anyone run into the similar issues? Any ideas on how to fix this will be GREATLY appreciated.
1. Hold down the Menu and Menu down/scroll buttons on the remote for approximately 3 to 5 seconds, until the LED on Apple TV flashes yellow. (OK I DID THIS)
2. After Apple TV restarts, a screen appears asking you to pick a language. Select the language you wish to use. (OK I CHOOSE ENGLISH)
3. The Apple TV Recovery screen appears with 3 selections:
* Restart
* Run Diagnostics
* Factory Restore
If the Apple TV intro movie plays instead, repeat the first step. (OK THIS FAR)
4. Select Run Diagnostics. The screen displays "Running diagnostics" and a spinning disc cursor appears. (OK THIS FAR)
5. Upon successful completion of the diagnostics, the screen displays "Your Apple TV is working correctly." Select Done to return to the Apple TV Recovery screen and then select Restart to return your Apple TV to normal operation. (I GET A WORKING CORRECTLY MESSAGE AND THEN RETURN TO THE RECOVERY SCREEN AND SELECT RESTART BUT INSTEAD OF APPLE TV GOING INTO NORMAL OPERATION I GET THROWN BACK TO THE "CHOOSE LANGUAGE" SCREEN AND THEN "CHOOSE RESOLUTION" AND THEN BACK TO THE APPLE TV RECOVERY MENU
6. If the Apple TV Recovery screen reappears, unplug the power cable from your Apple TV and plug it back in. Your Apple TV should restart normally. (I TRIED THIS BUT I END UP IN THE SAME SPOT AS BEOFRE UNPLUGGING)

I too am having this problem. I've got a ton of stuff synched to it, including some rented videos, and dread having to reload it, but I eventually tried the restore option. It gave me an error and refused to to that.
For the past two weeks I've been having more and more problems with the unit. Each time I run the diagnostics it says there is nothing wrong.
I've made an appointment with an Apple genius tomorrow to try to get some answers.
Message was edited by: Jeff Barlow

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