Is the 7.5.3 CD an original? This computer needs an enabler which may not be on the cd you have. I What Brand of CD-ROM do you have? I have experienced mixed results with these media. I suggest setting the SCSI ID to 3. Good Luck.
Investigate a Tutorial about how to enter DFU Mode on the phone and see if iTunes will recognize it. Download the current version of iOS and install it in iTunes ,by holding Command when clicking the install button to restore firmware. Good Luck.