Updated to OS 10.6 snow leopard so I could use SeasonPass and get ATV Flash working.
Set up SeasonPass and all seemed to be going well. Itunes opened and asked to restore. get "iTunes restore script failed!, selecting IPSW in Finder..." message in Seasonpass window. Selected custom restore ispw file which was downloaded. and now I have a flashing light on my ATV2 and when I try either custom or apple restore I get "The Aple TV "Apple TV" could not be restored. An unknown error occurred (1611)