Credit where it's due, your backtracking has given me the confidence to try this now.
Edit:
Tried this. Got to the "type reboot and let iphone reboot" part, the iphone didn't reboot. I put it into FDU mode and tried to restore to custom 4.0 but itunes gave me a 1600 error.
I saw a few "use pwnagetool" fixes for that, but i don't have a mac
I assume those people with a mac who fixed it used pwnage tool to create a custom 4.0 and didn't get a 1600 error when trying to restore to that firmware?
If that works, what's the chances someone with a mac wants to upload a pwnage tool'd custom 4.0 for us windows users?
That is, unless there's yet another fix.