Unable to restore after 4.1 update

I updated my Apple TV to the latest 3.0.2 version.
I flashed the 4.1 update from my flash drive.
I could not boot up the software.

I have attempted a factory restore on the Apple TV.
It tells me that I have restored.
I run the diagnostics and it says everything is working.
When I restart it dumps me back in the loop of picking the language, etc.

Can you help?

Has your AppleTV hard drive ever been modified or replaced?