You really can't restore in iTunes?
Have you tried the other way - hold the power button and the menu button until it does a hard reset?
1. Turn off iPhone - Hold down the Sleep/Wake button for a few seconds until the red slider appears, then slide the red slider. Ignore this step if your iPhone is already off.
2. Press and hold down the Home button for about 10 seconds until a yellow triangle with a text which says Please Connect to iTunes appears.
iPhone Recovery Mode
3. Plug the iPhone into Mac or Windows PC. Release the button if you havent.
4. Run and open iTunes if its not already opened yet.
5. iTunes will prompt a message that says iTunes has detected an iPhone in recovery mode. Click OK.
6. You will be taken to the iPhone pane. Then, click on Restore.
7. Wait for the full restoration process to complete, and the iPhone will be back to the original settings state as when it left the manufacturing factory, typically a working phone again if you face any problem, unless its hardware related.