Need help to restore GSM iPhone 4

Hi iPhone Experts,,
After creating a backup in iTunes I tried to update my GSM iPhone 4 from iOS 401 to 5.0.1 and it crashed during the update. iTunes says it detects the phone but can only do an restore and update to fix it.
The current problem is I told iTunes to do the restore and get 5.0.1 installed but this message came up: “The iPhone could not be restore. An unknown error occurred (3194).”
I selected the “more information” button and the apple support website advise me that to “resolve error 3194 by updating to the latest version of iTunes. This device is not eligible for the requested build" in the updater logs confirms this is the root of the issue. For more Error 3194 steps see: This device is not eligible for the requested build above."
I do have the most up-to-date version of iTunes so any suggestions on how to fix this please?
Thanks in advance.
