iphone startup loop?

I was planning on selling my iphone 3g. I backed up all the data and put it onto my new iphone.
On the old one i then did the general > reset > erase all content and settings.

It did all the stuff it needed too with the loading bar etc.
Now when it rebooted it goes to the apple logo and the spinning circle appears but wont load? After about 10 minutes it goes black screen and then spinning circle and crashes. I've tried removing battery etc and it's a no go.

It was jailbroken using jailbreakme on 4.0.1
My power button also doesnt work so i cant get into recovery mode.

If you search around you will find this is normal after erase all content and settings. It wipes the os from the iPhone and you must restore.

As this is a 3G, there is nothing stopping you restoring 3.1.3 or older on the iPhone.