Locked phone wants system restore, but cant enter pw to connect to itunes

My iPhone suddenly froze, said there was no service, then upon restart, told me it needed a system restore via iTunes.
I plugged into computer, but it would not connect to iTunes without a password on the phone.
The phone does not display the pw screen, so I cannot enter it.
I called AT&T and iPhone and got nowhere. They said I could pay $30 to troubleshoot. But told me they cannot remotely control the phone or pw anyway, so what can they do? (she had no answer)
Can anyone help me get past the pw lockout so I can get the phone to connect?

Does the iPhone display the Connect to iTunes prompt?
If so, it should not be asking for a password in iTunes to restore the device.
You can always try putting the phone in DFU mode, use the search in the upper right hand corner of the forums page to find instructions or search google.

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