Failure code 702: what does it mean?

My iPod is OS X formatted and used with iTunes and 10.4.10.

I was experiencing more tune skips (play 20% then skip) recently so I ran diags. The automatic test stops at step 8/8 with a Failure Code: 702 (26 defects) error message and a red screen (the "red screen of death" I suppose).

I figured this was a drive issue, but I've run OS X disk utility, done a restore, even reformatted and then restored, checked the built-in SMART diagnostics -- it's all clear. I'm thinking the disk may be fine.

The only other odd thing is the SDRAM Full Test, which so far is not completing after running for about 5-8 minutes -- but nor does it fail.

I've run a number of Google searches, but nobody seems to know what a 702 means. It doesn't appear to the drive. Likewise I found several questions here, but no answers. Apple's knowledge base and tech support are silent.

So, what does it mean?

Thanks!
john