From the linked article:
Check your iPod with Diagnostics Mode
It is possible that your iPod's hard drive has started to fail. Take your iPod and place your right thumb on the centre SELECT button and your left on the top MENU button. Press down both thumbs for about 6 seconds until your iPod reboots. Immediately move your left thumb around to the rewind button |<< on the left and hold this down together with SELECT for a further 6 seconds. Your iPod should now switch into Diagnostic Boot mode. Press MENU for Manual Test, then select IO > HardDrive > HDSMARTData to reveal your stats. For comparison here are mine taken when my 6th Generation Classic was about 2 years old:
Retracts: 889
Reallocs: 12
Pending Sectors: 0
PowerOn Hours: 2202
Start/Stops: 894
Temp: Current 24c
Temp: Min 10c
Temp: Max 50c
Take a note of your results. When finished press MENU+SELECT for 6 seconds to reset the iPod again.
With modern disk drives sectors are no longer marked bad by a disk scan, if the SMART firmware detects a sector it has trouble accessing it will attempt to invisibly reallocate it to a spare area of the disk.
<snip>
Large numbers of Reallocs or Pending Sectors (several thousand in the case of a classic) would suggest your drive is failing and that you may need to repair or replace your iPod. Check your stats after another attempt to update your iPod. If the numbers increase that again points to hard drive failure. While it won't be good news at least you'll know it isn't some random software problem and you can decide what to do next.
tt2