Root mytouch 3g stuck in some demo loop?

[obamanation]

phone works...but the MYDEMO keeps looping...interupting calls and medias..
tmobile said basically the only way to fix it would be to flash it and reinstall 2.1 ...

how do i go about doing that... ive been trying for hours now i have my whole desktop full of random programs i had to download to do what im trying to do.. i unlocked and jailbroke my iphone 2 years ago... but this android stuff is complicated... what can i do to get this phone working for my wife? this is a craigslist phone so god knows what its history could possibly be..

firmare 2.2 update1
build number 1.35.531.3_demo cl255081 test-keys
software number 1.35.531.3_demo

 

[Cramill]

Did you try rooting and flashing any roms?

Root Guide

2.2 Rom Or try and find a 2.1 Stock ROM

I don't know if this would help at all:

Unroot Guide