I recently had this same problem and since no one knew how to fix it, I began trying new things. I finally did it. The problem is that I didnt do anything special. I restored to 1.1.1. I then jailbroke through jailbreakme.com. I made sure to update installer if there was an update. I then installed oktoprep and updated to 1.1.2. Then I ran the jailbreak.jar(im on a mac). So now I was at a jailbroken 1.1.2. I updated installer. I installed services as well as bsd subsystem. I turned off autolock. Then I installed the dev team 1.1.3 soft upgrade. This took quite awhile and when it was done it was stuck at the recovery mode itunes screen. I went ahead and unplugged and plugged it back in and the recovery screen went away and I was at a 1.1.3 jailbroken screen. I do not know if any of this information will help, but hopefully it will. If you have any questions on what I did let me know and I will answer as best I can.