I've had this exact same problem. I tried restoring my iPod, but it seemed to have only made it worse. After it had been restored, it asked if I would like to sync my songs to my iPod. I said yes. Now whenever I connect it to my computer, it always comes up with an error message that says certain songs couldn't be copied to my iPod, since the files could not be found. After I press "ok", moments later my iPod disconnects from iTunes. A few minutes after, it connects again, and comes up with the same error message. It does that again and again or at least until I disconnect it. Just recently I tried pressing the buttons on my iPod (the screen is still milky and dark) and found out that I can actually play my music! I'm so glad to know that it's working, but I want my screen back. ):