iPhone 2G accidentally updated to 3.1 in iTunes

I recently picked up a new iPhone 3GS and decided to give my 2G with jailbroken/unlocked 3.0 to my dad (yes, I'm a good son :)), so I needed to wipe it clean. I went to Settings -> General -> Reset -> Erase All Content and Settings. This takes quite a while so I left the phone overnight. I woke up in the morning and the battery was dead (had full charge night before) and even after plugging it in, the phone would give me the apple logo and the loading icon would freeze.

Nothing worked except putting the phone in DFU mode and connecting it to iTunes, which forced me to upgrade to 3.1 in iTunes. What are my next steps to get this to a working and unlocked firmware? I need to give this phone to my dad at some point next week, so I can't wait too long.

Questions:

1) Can I unlock from my current state (2G -- 3.1 upgraded in iTunes)?
2) If I can't unlock from here, can I downgrade and then unlock?
3) What options do I have here? I'm a bit confused...

Thanks!

You have to options at 3.1 firmware

1) Use a custom made 3.1 IPSW, restore again & at the same this will Activate & Jailbreak.

2) Downgrade to 3.0/3.0.1 firmware & use redsn0w to Activate & jailbreak

Redsn0w guide
iClarified - iPhone - How to Unlock/Jailbreak Your iPhone 2G on OS 3.0.x Using RedSn0w (Windows)