Iphone 3G + IOS4 = Brick

Got a slightly weirder one perhaps.
The phone has been synced and restored recently. During the upgrade, it hung during the restore phase of the upgrade at about 75%. Timed out.
The phone boots into restore mode, (have tried DUI mode as well). Restoring either of the two backups I have hangs at about 75%.
Grabbed the IOS 4 .ipsw. Forced a restore from it. Hangs at 25%.
Tried to use the .ipsw from my wife's laptop. Hangs at 25%.
Created a new user, installed Itunes 9.2 afresh. Tried to install the .ipsw. Hangs at 25%.
Any other suggestions?

I had the same problem with my 3G phone when trying to upgrade from 3.1.2 to iOS 4. I attempted everything (including the preceding instructions). Attempts include reinstalling iTunes 9.2, different user accounts, different computers, setting DFU mode instead of restore etc. Nothing worked. During a restore, the phone would display the Apple logo and the progress bar would freeze at about 2/3rds to 75% of the way through.
Visited the local Apple store's Genius Bar about the problem, and this was the solution:
Apparently for some people, iTunes is wonked when you UPDATE it over a pre-existing installation. Folks have suggested reinstalling iTunes, but I was not doing it correctly! You have to COMPLETELY remove iTunes, including all associated files in the volume library as well as the user library. I didn't remove the documents in the volume library!
I was directed to this support document:
http://support.apple.com/kb/HT1224?viewlocale=en_US
I did the following:
1. Move my app *.ipa files elsewhere, as well as my music directory to preserve them for re-import later.
2. completely remove iTunes and all traces of it following the above link's instructions.
3. Restart computer, then download and reinstall iTunes 9.2
4. Restart computer again.
5. Hook up iPhone and attempt restore. Allow iTunes to re-download iOS 4 *.ispw if necessary.
6. Re-import App *.ipa files by selecting them all and double clicking, iTunes will automatically add them back.
7. Re-import music files. Time consuming, but it worked.
Worked!
I did lose some app-specific data, but nothing I can't recover. I also lost all my iTunes Playlists. Annoying.
I don't know how Apple managed to bungle this upgrade so badly. This cost me a lot of time and frustration. I used to be safe in assuming software upgrades would be hassle-free. I guess that's not true anymore.
Good luck!

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