My iPhone 3GS restarts repeatedly. Cannot be restored even in DFU Mode Restore.

My iPhone 3GS crashed and restarted on its own while running the Pandora app while plugged into a USB and charging. After it would finish starting up, it would say "activation required", as well as showing "no service" where there should have been service available. It would then restart after about 30 seconds to a minute. It would do this repeatedly in an endless loop of restarts.
I tried to do the "DFU Mode Restore" by holding the power and home buttons for 10 seconds, then holding the home button only until it connected to iTunes. The phone did have the black screen, and iTunes told me that the phone was in recovery mode and needed to be restored to be usable. The restore seems to complete, but in the end it fails. It says, "the iPhone "Iphone" could not be restored. An unknown error has occured (1)." It just leaves me with a screen showing that I should connect to iTunes with a USB cable.
Also, it shows no information on the phone in iTunes (capacity, software version, and serial number all show up as "n/a").

Hello chiropteromania,
Thanks for the question. Based on what you stated, it seems like you get an error when trying to restore an iPhone. I would recommend that you read these articles, they may be helpful in troubleshooting your issue.
Resolve iOS update and restore errors in iTunes
Resolve iOS update and restore errors
Check for hardware issues
Related errors: 1, 3, 10, 11, 12, 13, 14, 16, 20, 21, 23, 26, 27, 28, 29, 34, 35, 36, 37, 40, 1000, 1002, 1004, 1011, 1012, 1014, 1667, or 1669.
These errors mean that your device or computer may have a hardware issue that's preventing the update or restore from completing.
Check that your security software and settings aren't preventing your device from communicating with the Apple update server.
Then try to restore your iOS device two more times while connected with a cable, computer, and network you know are good.
Confirm that your security software and settings are allowing communication between your device and update servers.
If you still see the error message when you update or restore, contact Apple support.
Thanks for using Apple Support Communities.
Cheers,
Mario

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http://theiphonewiki.com/wiki/index.php?title=ITunes_Errors
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regards Jack.
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Do you have the latest version of iTunes? Did you check for anti-virus software? One of the sections talks about interference from anti-virus software and firewalls. Also, you should not have to make any changes to your Host file unless your computer has been used to jailbreak a phone. I worry because you were using a number of software applications that are designed for jailbreaking devices. Excerpt from this support document. Get help with iOS update and restore errors - Apple Support
Check for hardware issues
Related errors: 1, 3, 11, 12, 13, 14, 16, 20, 21, 23, 26, 27, 28, 29, 34, 35, 36, 37, 40, 1002, 1004, 1011, 1012, 1014, 1667, or 1669.
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Then try to restore your iOS device two more times while connected with a cable, computer, and network you know are good.
Make sure that your security software and settings are allowing communication between your device and update servers.
If you still see the error message when you update or restore, contact Apple support.

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Two Days and no reply :/

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My iPhone 3GS restarts repeatedly. Cannot be restored even in DFU Mode Restore.

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