I still have an issue with my Nano after trying all the solutions I found online. Whenever I press the sleep/wake button (which previously turned the screen blank without affecting my playback) it now pauses the music. I have to then press the sleep/wake button again to turn the screen back on and then press play for my music to resume.
I decided to try leave it alone and see whether the music would still play if I didn't press anything but plays for about 20 seconds before cutting out and forcing me to press play for another 20 seconds of listening...
Suggestions would be thoroughly appreciated! And yes, I have rebooted my ipod and I have plugged the earphones in correctly.