I need help with my itouch ):?

so. here's what happened. my dad got an 8gb itouch from work, someone already owned it as well. the person who last owned it had a bunch of apps and stuff i couldn't get rid of off the itouch alone. so i went into the itouch, went into settings and reset everything. now it's stuck on reboot. i've tried everything. i've tried holding the power button for three seconds, then holding the home button, then letting go of power and then holding home for twenty seconds. itunes recognizes it, but it won't let me restore it!!! it's saying that it's not eligible for it. what can i do? i can't get the newest version of itunes because i have a tiger 10.4.11 :/ i really need help with this please. i can't go to apple store, because the closest one is in las vegas, which is over two hundred miles away. PLEASE HELP