It sounds like you didn't do all of the 5R's... you need to do them all. You might want to check the website for more guidance
http://www.apple.com/support/ipod/five_rs/nano3gen/
It's not terribly logical but reloading iTunes can change everything -Did you do that?
The 5 Rs: Reset, Retry, Restart, Reinstall, Restore
Remember these five basic suggestions if you have a problem with iPod nano. Try
these steps one at a time until your issue is resolved. If one of the following doesn’t
help, read on for solutions to specific problems.
- Reset iPod nano. See “General Suggestions,” below.
- Retry with a different USB port if you cannot see iPod nano in iTunes.
- Restart your computer, and make sure you have the latest software updates
installed.
- Reinstall iTunes software from the latest version on the web.
- Restore iPod nano. See “Updating and Restoring iPod Software” on page 61.