ITunes claims that iOS 3.1.3 is the current version (Can't update to 4)

I've been trying to upgrade my recently acquired iPhone 3G to iOS4. Unlike other people who are given the option to upgrade, I am told "This version of the iPhone software (3.1.3) is the current version". I know this is not true and I want to update, how do I do so?
Before you ask, yes, I have updated to iTunes 10.1.1.4...

Are you sure your phone hasn't been hacked/jail broken? Are you sure your phone is a 3G, and not an original iPhone?

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