I don't think your in DFU mode, I think it may be power button issue. I had this same problem last week with a 3GS. Try restarting your PC, because as soon as I did that it worked the very next try, not saying it has anything to do with it but dose not hurt. Restore your phone and either wait for un-tethered, I believe it will be just before Christmas or day of! or after restore try putting into DFU. Based off the fact of the USB --> iTunes, your not in DFU, that is recovery mode, there is a difference. If it goes into recovery mode USB--> iTunes then I think you need to recover before you can be in DFU mode. then when phone is restrored, off and plugged in Try to put in DFU mode, If it does not work keep trying and trying and trying. It took me 3 hours to get 3 GS in DFU mode with a faulty power button. So if you have patients to keep doing this over and over tell DFU hits then, i from experience know you can get it. that being said, this is a tethered jailbreak, every time you reboot your idevice you will need to be in DFU mode to turn phone back on. if your having problems getting in DFU I advise that you wait for an un-tethered break.