New 5th gen touch stuck in Recovery loop at set up

I just got a new Touch and have been in the process of trying to get it set up with iTunes.  I started out doing  a restore from back up, but now I'm stuck in a loop where I get a message that "iTunes has detected an iPod in recovery mode.  You must restore this iPod before it can be used with iTunes."  When I restore, it spends an hour downloading iPod software and then I get this same message again.  (It will apparently do this ad infinitum.)  I do have the most current version of iTunes installed. I've tried turning the iPod on and off, disconnecting and reconnecting it, and resetting it.  I've tried different USB ports.  I've rebooted the computer.  Nothing changes.
Any ideas for what else to try?  Thanks!

Maybe:
Restore loop (being prompted to restore again after a restore successfully completes)
Troubleshoot your USB connection. If the issue persists, out-of-date or incorrectly configured third-party security software may be causing this issue. Please follow Troubleshooting security software issues. .
Next try placing in DFU mode and then restoring.
How to put iPod touch / iPhone into DFU mode « Karthik's scribblings
Then try restoring on another computer.
Last, make an appointment at the Genius Bar of an Apple store.
Apple Retail Store - Genius Bar

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