Help restoring iPod touch 2nd gen to OS 3.1.3

I have an ipod Touch 2nd gen that had been updated to OS 3.1.3. I haven't had many problems with it. The last time I had to restore it was when iTunes 9.1 was new and I downgraded back to iTunes 8.
I keep getting a message that there is purchased items on the iPod and do I want to transfer them to the Mac if not then it will be deleted from the ipod. I click on "don't transfer", but the next time I try to sync I get the same message.
I tried restoring the ipod and it keeps insisting that I should "restore and update" and I don't get a "restore" option. I don't want to update to OS 4.
The odd thing is iTunes apparently keeps tossing the iPod2,13.1.3_7E18Restore.ipsw and iPod2,12.2.1_5H11aRestore.ipsw into the trash without my permission.
I tried updating from a backup copy and this time it let me click "restore" but then apparently it phoned home to Apple and it said the ipod was "not eligible" to restore to OS 3.1.3.
I tried turning off the internet connection and then it refused to restore at all. >:(
The only thing that I can think of is that iTunes is either 1. trying to force me to buy an update I don't want or 2. that it thinks I have to update the iPod Touch because I bought an iPhone 4. >:(
I really preferred the days when we could just run a standalone ipod updater. Does anyone know of a way I can force the ipod Touch to be restored either to the original iOS 2 or the updated iOS 3 (which afterall I did pay for !)?
Thanks.

You cannot restore to OS 3.1.3 simply because Apple has stopped signing that particular firmware. What happens is for every firmware your device creates unique keys knows as SHSH blobs. For you to be able to update or restore to that firmware Apple checks those blobs and signs them (ticks them off). However if Apple has stopped signing them which it has for OS1 OS2 OS3 O4.0 & OS4.1 you can no longer go to those particular firmwares. Currently Apple is only signing OS 4.2.1 firmware so you can only restore to that one.
Note- There is one final hope for you to restore to 3.1.3. Google SHSH blob extractor.

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