IPod Touch 3.0 update fails on my iPod, endless loop of failing updates

Here is the situation. I had version 2.2.1 on my iPod touch, I bought the 3.0 update, and then I began the update after connecting the recognized iPod to the computer. After doing so, my iPod began the update and right after the update finishes, my iPod says that it could not update to 3.0.
After that, it became an 'Unknown Device' in my computer.
Then I decided to take it to the Genius Bar twice, and they replaced the iPod and assured me that the update should work. After that, I came home and began the update.
This became a repeat of what happened with my first iPod. It did the exact same thing except instead of showing up as an 'Unknown Device', the iPod showed up in recovery mode. I thought that I would just forget the update at that point and just restore my iPod. Apparently, I can't. iTunes lets me "Restore and Update", not "Restore", which means I must try to update it to 3.0 again.
I did the "Restore and Update" three times, with the same situation happening over and over. Suddenly, it showed up as an 'Unknown Device' again and now I'm back where I started.
Will I have to go back to the Genius Bar and have it replaced again or can I fix this at home?

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IPod Touch 3.0 update fails on my iPod, endless loop of failing updates

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