So it was working and a fully activated phone until the update and now you cannot use it. Try hooking it back up to iTunes and try again. Also thru DFU mode and that might work.
To get into DfU mode:
Do you know if your phone was Jailbroken? unlocked? This sounds as if the phone was hacktivated before and now that it's been updated the Jailbreak is gone and it's having trouble being activated.
My iPhone 4 went straight to Dfu mode after installing the new ios7. I had to take it to the Apple store. After the 3rd restore attempt they got my phone working.