Hello, Welcome.
If you have the ability to visit an Apple Retail Center in your local regional area. You may wish to make an appointment so they can look at your iPod for you.
If it is determined that the iPod Touch needs replacement and you are still under warranty. The store will be more then happy to assist with service replacement options in store if they have it in-stock.
Please keep in mind if this is an engraved iPod Touch it may have to come in for mail in service if it needs replacement so your replacement iPod Touch comes back engraved as well if it is determined you need one.
Local Apple Retail Stores are not currently equipped to re-engrave iPod Products at this time.
http://www.apple.com/support/ipod/service/faq/