iPod stuck on "hold"

Seems to be a few issues with this.

So the little padlock that appears in the corner of the screen when you have the hold switch toggled on is always there. So the iPod thinks that its always locked! But alas the hold switch is in fact not locked!

I've tried every possible resolution.

toggling the hold button on and off

"resetting" the iPod by holding down the centre and menu button obviously doesn't work 'cause it thinks its locked

I restored and reinstalled in itunes. No luck.

I can't "drain" the battery because it just turns itself off (sleep mode) and obviously can't turn it on because it thinks its locked. So I have to turn it on by plugging it into something

Every so often the padlock flickers on and off for a moment and I occasionally get the split second chance to select a song and play it before it locks again.

I even checked myself into an appointment at the apple store. I take it out of my bag and lo and behold it works again!!! Its a miracle! Only to bring it home and have it lock again.

I know I'll most likely have to take it to the apple store again but has there been any successful remedies? Or am I doomed to have to wait for a new iPod replacement.