i had the same red x in a circle, and i searched online for solution, and found this solution,
so i combined a couple and i did it my self and worked.
this what you should do:
(make sure your somewhere quiet first, for step 3)
1. hold the select(middle button) and menu till it resets
2. hit the left top (the side with the luck key) a few times semi hard (not so hard to break it, but hard enough to move back the pin or the reader of the hard drive in place) on a hard surface, i did it in a wooden one.
3. listen closely to your ipod, it makes a little noice. kinda like old modem or something, youll know when you hear it. mine worked the first time so i dont know how it sounds if it doesnt work, lol. but you might have to try it a coe times. but make sure you hit it hard enough.
4. watch your ipod come back to life
let me know if you have any question..