Working backwards you can see that your step 1 is correct, so your problem is in step 2.
Hint: no current flows through R1 or R2. All of I_0 flows through R3 and back into the current source.
The circular arrow in the middle isn't valid since it doesn't represent a circuit.
Thanks for the tip, I think I get the idea: If I look at the node south of the current source (call it B), using KCL, so apparently the current coming into the node (from R3) is I0, and the current coming through the source is also I0, which means there is 0 amp going to R1 and R2.
I'm also reading node analysis and it says I can ground any node and it shouldn't affect the outcome. I guess if I ground node B this becomes more obvious.