User data permanently saved on iPhone. Even after FULL 2 HOUR WIPE

Just got my 3G S and I restored my old iPhone 3G prior to selling it. After that I found that all my user data was saved on the phone. When I downloaded Pandora and opened it, my account info was saved and I auto-logged in.
I researched and found the FULL ERASE option inside the iPhone settings. So I performed the full erase, which takes about 2 hours. Then it restored again.
After that, I went into settings --> App store. My old account email was still there!! I changed it to a new email address and logged in. Then I downloaded Pandora again. SAME PROBLEM! AUTO-LOG IN!
So app store and pandora both had my old user info saved.
To say that I am frustrated, upset, and ready to die, is a gross understatement. My iTunes randomly lost it's entire music library as well. (All 13,000 + songs were missing and could not be found, yet the files are perfectly fine.)
This is never ending. How do I just wipe my phone?? Please help ;-(
Crying,
-Carlos-

Visited the Apple store today and they replaced the phone. They could not explain what was going on except for being a software issue.
They said if after restoring I have the same issue, you would have to restore the phone to new and re-install all apps and information manually from scratch.
I restored the phone from my backup, and all went well. No more slow LTE speeds, plus a new device.
The only thing I can think of that may have happened is updating carrier settings while updating the iOS at the same time. I thought it was normal because iTunes popped up the carrier update notification a few seconds later after starting the iOS 8 update.
The carrier update did have an option to cancel. I will definitely wait for the iOS update to complete before I update carrier settings next time.
I'm just wondering if my phone was out of warranty, and this happened, would Apple still replace the device?

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