My iphone 3GS updated itself to ios 6 and never started to work

My iphone 3GS updated itself to ios 6 & then things went absurd.
iphone kept restarting after showing apple logo. The issue continued even after a complete restoration. Apple service now says firmware got corrupted and so I have to pay 9500Rs (200$) and get a phone replacement of the same model. And there is no other solution.
Can anyone give any other solution or else is it worth to get it replaced for 9500Rs.
I have spend money for no real hardware issue and apples improper firmware methodology and updates...

This is what I posted to someone else having the same issue:
I having the same issue about the and iTunes says "The iPhone cannot be  restored at this time because the iPhone software update server could  not be contacted or is temporarily unavailable.". I've had the  iPhone  3GS since it came out. It was working fine until I just tried to  update  it. It has NEVER been hacked or jailbroken. WE AND A FEW OTHERS are  having  the same issue then it is more than likely that this is an  update issue.  I took mine to the Apple store and the tech tried to  update it and he came to the same problem and told me he couldn't  update it. My assumption is that we are not the only one's with this  issue and that if  there was a way to update it to the update before  this last one it  might be a solution. I don't know how to get the  previous update. Apple  probably is aware of the problem, and hasn't  come up with a solution yet. Or, enough people haven't complained yet.  The tech suggested that  there might be something wrong with the phone  itself, but that couldn't  be since it was working perfectly before I  updated it and others are  having the same issue. It is highly unlikely  that a lot of people are having the same hardware issue all of a  sudden at the same time. Apple/iTunes needs to fix this... and hopefully soon
Also:  I can update or restore my iPhone 5 and other iPhones so it is not an  issue with my firewall or other software on my computer. No one touches  my iPhone or my computer they are secure, locked all the time, and I  have no jailbreak software on my computer (Apple tried it and they are  clueless at the moment from what I can tell).

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