So is this issue fixable? Maybe. There was a forum post on TiPb which points users to a fix for this issue, apparently that is the same fix we listed in this post and it might not work when you are downgrading from iOS 4 to iPhone OS 3.1.3.
The problem actually lies with the fact that Apple signs the firmware now and you cannot upgrade or downgrade an iPhone using a firmware that Apple has not signed anymore, so this issue might go away if you use an older firmware which is signed by Apple.
Once again, using an Apple signed firmware may not fix this issue and we are actively researching on things that would help users to downgrade their iPhone or iPod Touch running iOS 4 to iPhone OS 3.1.3.