I had an 3G stuck in recovery loop, To fix, get a old HD do a fresh install of XP (do NOT install any other software), connect to the www download itunes and put the phone into DFU , you only need to hold the buttons for a few seconds, apopup will tell you your in DFU mode.
itunes should see your phone and tell you to restore.Do so.
You must have a completely clean system to fix this .
A $80 junker is now restored.