DWolfsbane,
Thanks for the clarification and update of this.
It does sound like an update to the iPod software may be best to see if that allows iTunes to read it, so let's focus on that.
As you're seeing this version of iTunes isn't reading, we'll try to reinstall the later version of iTunes that you had, but let's be sure there's a backup of your iTunes files before we do this. This will help to be sure that deleting the newer version before installing the previous version won't cause data loss as you'll have a second copy. Check out the section labeled "Back up your library and media files" of the following resource as that will walk you through the steps, but the entire resource is helpful:
Back up and restore your iTunes library on your PC
Once you've successfully made a copy, you can proceed with removing the current version to prepare to download a previous version. If you need help with removing iTunes, we'll include a resource below. In addition to that, we'll have the link for you to locate a previous version that you know works with your iPod for the download.
Remove and reinstall iTunes and related software components for Windows 7 and later
iTunes Downloads
We hope that is able to resolve what is occurring here. Should you need more in depth help with this, you can Contact Apple Support to receive direct help in real time.
Have a great day!