Stuck in Recovery Mode - Tried All Troubleshooting Steps

My 16GB iTouch [latest firmware] is stuck in recovery mode... iTouch displays 'Connect to iTunes' and when I do this iTunes says, "iTunes has detected an iPod in recovery mode. You must restore this iPod before it can be used with iTunes."
So, like a good little puppet, I restore my iPod.
When the process completes a message pops up saying restoration successful and iPod restarting.
After clicking ok or letting message expire on its own I get bumped back to where I was in the first place. My iPod goes straight back into recovery mode, same message displayed on iPod and iTunes.
I have tried everything from reinstalling iTunes to different USB ports to different computers [PC & Mac], my battery is fully charged, and I am all out of ideas.
Any suggestions??

Hi dimpulse,
Try the general tips in this article: http://support.apple.com/kb/TS1275
If the issue persists after trying the tips in the article above, the iPod may need hardware repair. Just request repair online, make a reservation to have a Genius at a local Apple retail store take a look at it, or call AppleCare.
https://selfsolve.apple.com/GetWarranty.do
http://www.apple.com/ca/retail/geniusbar/
iPod, iPhone and Mac technical support: 1-800-263-3394
-Jason

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