I have an actual 1st generation ipod and am having a similar problem. I had a windows based laptop, which my nano worked on. When I bought my iMac in December '07, I reformatted my ipod to use with my mac. After restoring my ipod, I added some songs and used it for a few days before I got a message telling me that I must restore my ipod. I don't know why the message appeared, but I connected my ipod and restored it again. After that, however, my Mac no longer recognized my ipod in Disk Utility, iTunes, or Finder. I've tried using other Macs, no luck, Windows computers (which actually recognize that something is connected, but it doesn't know what), but nothing seems to work. My ipod turns on fine, I can do everything except add/remove music. It will charge if I plug it in, the entire menu system works. I've done the all the tests in Diagnostic mode and everything seems to be fine, but it still doesn't work. >.<
Any help will be greatly appreciated.