IPhone 3GS stuck in recovery loop after I tried restoring phone from a jailbreak, can anybody help?

Unfortunately they will not trade your iPhone because you manipulated the operating system of the device, and they can detect that a mile away. (See Error 1015 on the Apple website). Basically any jailbreaking of the newer operating systems almost always corrupts the device software itself, so you literally have to uninstall the software, then reinstall it. There are no quick repairs without extracting it completely. Good luck to you:)