If you make an appointment at the Genius Bar of an Apple store they will try to restore you iPod at no cost unless there is a hardware problem.
Try placing the iPod in recovery mode and then see it iTunes will see the iPod so you can restore the iPod to factory defaults/new iPod. That also bypasses the passcode when you are on a new computer. For recovery mode see:
See the following for getting iTunes to see the iPod: