My iPod Touch 4G 32GB is not restoring. Everything looks like its going good, and the ipod shows that it is restoring, but then when it finishes with supposedly restoring the ipod goes back into DFU mode and it doesn't restore at all.
Are or were you Jailbroken? Do you have TinyUmbrella installed?
If you have tinyumbrella installed, launch it and click the advanced tab and uncheck the box that points to Cydia.
Since you have TU open, go ahead and see if you can kick the phone out of recovery. If not, then after making the changes I suggested, restore and see if you are having the same problem.
You might also want to consider changing ports and possibly cables.
you know there are MB model ipods and MC. MC in newer version, and there are only two ways to jailbreak it. either sn0wbreeze or jailbreakme.com. And you cant use those easy methods like fix recovery with tiny umbrella.
Uninstall iTunes, and download it again from Apple. Then install the one you downloaded. You will not lose any music, apps, etc. I had the same problem. It is caused by a corrupt file or the mobiledevice file not working.