Failed restore on iPhone 3GS because iTunes says there is no SIM card installed.

I have an unlocked iPhone3GS that I used in Thailand for 2 years with a Thai SIM card. Now I am back in the USA and I got a AT&T SIM card without a contract. I wanted to update to the newer version of iOS so I contacted AT&T and had them do an authorized iPhone unlock. I backed up my iPhone and then restored it in iTunes. After restarting the phone iTunes told me there was no SIM card installed in the device. I've taken the AT&T SIM card out and put it back in but nothing changes.
Any help or suggestions?

The iPhone was jailbroken before I went to Thailand. I never had a contract in Thailand ethier. The phone was working fine on my new AT&T SIM card for 2 weeks until I went to restore and update the iOS.
I also tried to use WIFI to activate the device instead of iTunes. After a few minutes of trying that a mesage tells me that Apple can't activate it and to try use iTunes or contact Apple support.

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