Boot in DFU mode, not recovery, DFU your screen stays black but computer recognize it in DFU and will tell u at the bottom of the screen.
REstored to 1.1.4
Run I liberty, did a full jailbreak unlock although the unlock won't work.
Than ran Modified Ziphone to downgrade basband
Then this is important you need to restore with 1.1.4 again because if you don't you will only be able to receive calls and sms but no outgoing.
After restore, i then upgraded my itunes to 7.7, reboot if asked
Then I used the latest winpwn 18.104.22.168, pwn this version of 2.0 iPhone1,1_2.0_5A347_Restore
Then i restored my iphone to the Custom 2.0 images in itunes, bootneuter ran well with out the 21 error this time and unlocked my iphone